Chapter 2 Section 3: Other Taxes Flashcards Preview

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Flashcards in Chapter 2 Section 3: Other Taxes Deck (6)
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1

What is the formula for AMT?

Regular taxable income
+/- Adjustments
+ Preferences
= AMTI
- Exemption
= AMT Base
x Tax Computation
= Tentative AMT Tax
- Tax Credit
= Tentative Minimum Tax
- Regular Income Tax
= AMT

2

What is the formula for the exemption amount for AMT?

1. Exemption (given: 83400 joint)
2. AMTI
- Threshold (158900 joint)
= excess
x 25%
1-2 = exemption

3

What are the adjustments and itemized deductions for AMT?
PANICTIMME

Passive activity losses
Accelerated depreciation
Net operating loss of the individual
Installment income of a dealer
Contracts (LT construction)
Tax deductions
Interest deductions on home equity loans - not mortgage
Medical deductions
Miscellaneous deductions not allowed
Exemptions and standard deduction

4

What are the tax preference items?

PPP

Always add-backs
Private activity bond interest income
Percentage depletion excess
Pre-1987 accelerated depreciation

5

How do you treat adjustments and itemized deductions for AMT?

Adj: can add or subtract
Itemized: always add

6

What are the AMT credits?

FACCE

Foreign tax credit
Adoption credit
Child tax credit
Contributions to retirement plan credit
Earned income credit

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