Ch 2 - Alternative Minimum Tax

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Author:
Ricksta760
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229954
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Ch 2 - Alternative Minimum Tax
Updated:
2013-08-14 00:42:34
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Alternative Minimum Tax
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Ch 2 - Alternative Minimum Tax
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  1. The 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
  2. AMT Exemption Formula
    Base 33750/45000

    • AMTI
    • <112500/150000>
    • ---------------------
    • Excess
    • x 25%
    • --------------------
    • <Reduction>
    • --------------------
    • --------------------
    • Base
    • <Reduction>
    • --------------------
    • AMT Exemption
  3. AMT Adjustments
    PANICTIMME
    • 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
  4. AMT Tax Preference Items
    (always "add-backs")
    Think Preference "Ps"
    • 1. Private Activity Bond Interest income
    • 2. Percentage depletion¬†
    • 3. Pre-1987 accelerated depr.
  5. AMT credit carryforward period (against regular tax)
    • 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
  6. AMT Credits
    (FACE it)
    • 1. Foreign Tax Credit
    • 2. Adoption Credit
    • 3. Child Tax Credit
    • 4. Contributions to retirement plans credit
    • 5. Earned Income Credit.
  7. Itemized Deductions not added back for AMT
    • 1. Home mortgage is OK not and add back for AMT.
    • 2. Charity is NOT an add back for AMT.

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