Calculations Flashcards
Taxpayer adopted a special needs child. Expenses were $15,000 and their AGI was $240,000. What is the adoption credit?
Wrote this 4-29-2024 - is it 2023 #’s?
Adoption phase out = $223,410 to $263,410. This is a difference of $40,000.
$240,000 - $223,410 / $40,000 = $6,176
$15,000 - $6,176 = $8,714
A taxpayer paid $7,000 of interest in 2022 on the mortgage given upon buying their first home. The taxpayer received a mortgage credit certificate which specifies a 30% credit rate. How much of a credit is the taxpayer entitled to in 2022?
4-29-2024 - are these the correct #s for 2023?
$2,000. 30% of $7,000 is $2,100, BUT there is a $2,000 limit when the amount is over 20%.
Sub unit 8.1
Michael had to pay $4,000 alternative minimum tax last year. This year, his regular income tax is $60,000 and tentative minimum tax on his income is $57,000, so he will pay only regular income tax. how much credit for prior year minimum tax can he take this year?
$3,000 , a credit allowed for the amount of adjustmened net minimum tax for all tax years reduced by the Minimum Tax Credit for all prior years. The credit may be carried forward indefinitely as a credit against regular tax liability. The credit is limited to the extent that the regular tax liability reduced by other nonrefundable credits exceeds the tentative minbimum tax for the year. Therefore, his credit is $3,000
In Year 1, Ron and Cindy had an alternative minimum tax liability of $19,000. This was the first tax year in which they had ever paid the AMT. They recomputed the AMT amount using only exclusion preferences and adjustments; the recomputation resulted in a $8,500 AMT liability. In Year 2, Ron and Cindy had a regular tax liability of $45,000. Their tentative minimum tax liability was $42,000. what is the amount of Ron and Cindy’s minimum Tax Credit (MTC carryover to Year 2? What is the amount of the carryover that can be used in Year 2? (Question 64 credits)
Carry over to Year 2 = $10,500 ; carryover used = $3,000
Calculate the carry over by subtracting the adjusted AMT from the actual AMT
Calculate the carry over used by subtracting the AMT tax liability from the higher regular tax liability.
