Flashcards in Chapter 2 Section 3: Other Taxes Deck (6)
What is the formula for AMT?
Regular taxable income
= AMT Base
x Tax Computation
= Tentative AMT Tax
- Tax Credit
= Tentative Minimum Tax
- Regular Income Tax
What is the formula for the exemption amount for AMT?
1. Exemption (given: 83400 joint)
- Threshold (158900 joint)
1-2 = exemption
What are the adjustments and itemized deductions for AMT?
Passive activity losses
Net operating loss of the individual
Installment income of a dealer
Contracts (LT construction)
Interest deductions on home equity loans - not mortgage
Miscellaneous deductions not allowed
Exemptions and standard deduction
What are the tax preference items?
Private activity bond interest income
Percentage depletion excess
Pre-1987 accelerated depreciation
How do you treat adjustments and itemized deductions for AMT?
Adj: can add or subtract
Itemized: always add