AMT Flashcards
AMT Calculation
AGI (or post itemized income) \+Add backs (adjustments) \+Preference Items =AMT Base -Exemptions \+AMTI (Alternative minimum tax income) Tax due = AMTI x .26 or .28 - Regular income tax due
Adjustments
\+Personal and Dependency Exemptions \+Standard Deduction \+Itemized Deduction (Excess 10% AGI) \+State income and property tax \+Misc Itemized deduction \+Home equity loan interest \+Qualified interest /private activity bonds \+ISO spread
Preference Items
Always +
Private Activity Muni Bond
Oil and Gas % depletion
(% depletion is the excess depletion over basis)
(cost depletion not a preference item)
Excess intangible Drilling costs Depreciation MACRS (straight line ok)
AMT Rates and Exemptions
26% up to $186,300 AMT base
28% over $186,300
Single Exemption $53,900 Phased out $119,700
married Filing Jt $83,800 Phased out $159,700
Business
Not applicable to small businesses
Average gross receipts for last 3 years < 7.5M
Corporate owned Life ins subject to AMT
Buy/Sell
Key Person
Endorsement method split dollar
Deferred Comp
Do Not Affect AMT
Cross Purchase Buy Sell
Collateral split dollar
AMT Planning
- Accelerate receipt of Taxable Income
- Defer paying property tax, state income tax, deductible medical expenses, charitable giving
- Defer exercise of ISO/disqualify ISO
- purchase public purpose instead of private activity muni bonds
Refundable min tax credit
- greatest of 50% of long-term unused credit (> 3 years old)
- or amt of refundable credit determined in previous tax yr