AMT - INDIVIDUALS

Question 1

FORMULA

Answer 1

Regular Taxable Income
\+/- Adjustments
\+ Preferences
\_\_\_\_\_\_\_\_\_\_\_\_\_\_
AMT Income 
- Exemption 
\_\_\_\_\_\_\_\_\_\_\_\_\_\_
AMT Base
*Rate (26% first 175,000/28%)
\_\_\_\_\_\_\_\_\_\_\_\_\_\_
TMT before credits
- Certain Credits
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
TMT 
- Regular Tax Liability
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
AMT (if positive)

FORM 6251

Question 2

AMT Credits

Answer 2

NONrefundable personal credits:

• child/dependent care
• adoption
• elderly/disabled
• child tax
• education
• IRA
• nonbusiness energy property
• residential energy efficient property
• Foreign Tax Credit can ALSO reduce the AMT

Question 3

AMT Adjustments

Answer 3

Depreciation - AMT uses 150% declining-balance
**No AMT adjustment is required for property using bonus depreciation

• Medical deduction is allowed only to extent it exceeds 10% AGI

SUBTRACTED:
- Phase out is subtracted from taxable income (no phase out for AMT)

NO DEDUCTION ALLOWED FOR: (ADDED BACK)

• Taxes
• 2% Misc. Ded.
• Home equity NOT used for the RESIDENCE
• Personal/Standard deduction
• Compensation element on the exercise date for INCENTIVE STOCK OPTION

Question 4

Preferences (+)

Answer 4

Alway ADD back

1. Real Property and leased personalty purchased BEFORE 1987, excess of accelerated over SL depreciation
2. Tax Exempt Interest on PRIVATE ACTIVITY BONDS (less related expenses)

Question 5

AMT Credit

Answer 5

Limited to the amount of AMT generated from timing differences, this credit is available in a year in which the TENATIVE ta is LESS than the regular tax

May be carried forward indefinitely