Alternative Minimu Tax (AMT)

Question 1

The alternative minimum tax (AMT) applies to who?

Answer 1

Applies to all taxpayers (individuals, trust, and estates) there are no corporate AMT taxes

Question 2

What does the alternative minimum tax do?

Answer 2

Parallels the regular federal income tax, in many ways, but uses adjustments and preferences to count differences

Back up to the federal income tax, to ensure that no taxpayer was substantial, economic income can avoid significant tax liability by using deductions and exclusions

Question 3

Taxpayer may have to pay the AMT in 2024 income for regular tax purposes, combined with any adjustments and preference items exceeds

Answer 3

Question 4

What is AMTI and how is it Calculated?

Answer 4

Alternative minimum taxable income

Question 5

After AMTI has been Calculated then what is calculated next and what is the calculation?

Answer 5

Calculate AMT

Question 6

What are the adjustments to taxable income for AMT?

Answer 6

Positive or negative

Question 7

What is a positive adjustment to AMT?

Answer 7

Is made when the deduction or exemption allowed for regular income tax purposes exceeds the deduction or exemption allowed for AMT purposes income is there for the calculation

Question 8

What is a negative adjustment for AMT purposes

Answer 8

Is made when the deduction allowed for AMT purposes exceeds that for regular income tax purposes and comes there subtracted from the calculation

Question 9

Alternative minimum tax

The standard deduction is it allowed for regular tax or AMT and what is the adjustment

Answer 9

Allowed for regular tax

Disallow for AMT

Positive AMT adjustment

Question 10

Alternative minimum tax

Is itemized deduction taxes - allowed or disallow for regular tax or AMT and is it a positive or negative adjustment to AMT

Answer 10

Regular tax allowed

AMT disallow

Positive adjustment to AMT

Question 11

Alternative minimum tax

Investment interested expense has limited for AMT purposes (related to private activity bond interest)

Is it allowed for regular tax or AMT?

Is it a positive or negative adjustment to AMT

Answer 11

Regular tax - allowed

AMT - disallowed

Adjustment to AMT - positive

Question 12

Alternative minimum tax

Exercise of incentive stock options (ISO)

How was it treated for regular tax and AMT?

Is it a positive or negative adjustment to AMT

Answer 12

Regular tax - not taxed

AMT - bargain element (spread) is added back

AMT adjustment - positive

Question 13

Alternative minimum tax

Tax benefit rule for state income tax refund

How was it treated for regular tax or AMT?

Is it a positive or negative adjustment

Answer 13

Regular tax - included in income

AMT -not included in income

AMT adjustment - negative

Question 14

Alternative minimum tax

Depreciation post 1986 property

How is regular tax or AMT treated?

Is it a positive positive or negative adjustment

Answer 14

Regular tax - MACRS allowed

AMT - ADS allowed

AMT adjustment - both

Question 15

Alternative minimum tax

Passive activity losses

Are they positive or negative adjustment to AMT

Answer 15

Both could be a positive or negative depending on circumstances

Question 16

Alternative minimum tax

Adjusted gain or loss

Is it a positive or negative adjustment to AMT

Answer 16

Both could be positive or negative, depending on circumstances

Question 17

AMT adjustments

Exclusion items versus feral items what adjustments or preferences are considered exclusion items

Answer 17

Standard deduction

Itemized deduction

Portion of the exclusion of gain from qualified small business stock

Tax exempt interest treated as a preference for AMT

To completion treated as attached preference for AMT

Question 18

AMT adjustments

Any adjustment /preference item that is not an exclusion item is a deferral item and includes what?

Answer 18

ISO bargain element

Question 19

The AMT paid in one year, maybe used as a credit against regular tax in a future year. The credit may be carried either what

Answer 19

Forward indefinitely, but not back