Ch 2 - Alternative Minimum Tax

is the excess of the tentative AMT over the regular tax.

paid in addition to regular tax.

Pay the greater of 1. regular tax or 2. Tentative Min. Tax

Base 33750/45000

• AMTI
• <112500/150000>
• ---------------------
• Excess
• x 25%
• --------------------
• <Reduction>
• --------------------
• --------------------
• Base
• <Reduction>
• --------------------
• AMT Exemption

• 1. Passive Activity Losses
• 2. Accelerated Depr
• 3. Net Oper Loss of the Ind Taxpayer
• 4. Installment income of a dealer
• 5. Contracts - % v completed
• 6. Tax Deductions
• 7. Interest Deductions on some home equity
• 8. Medical Deductions (10% agi test)
• 9. Misc Deductions NOT allowed
• 10. Exemptions personal and std deduction

• 1. Private Activity Bond Interest income
• 2. Percentage depletion 
• 3. Pre-1987 accelerated depr.

• 1. certain allowable AMT paid in a taxable yr may be carried forward as a credit it may only reduce regular tax NOT future alt min tax.
• 2. Carry forward is forever

• 1. Foreign Tax Credit
• 2. Adoption Credit
• 3. Child Tax Credit
• 4. Contributions to retirement plans credit
• 5. Earned Income Credit.

• 1. Home mortgage is OK not and add back for AMT.
• 2. Charity is NOT an add back for AMT.