R2 Other Taxes

Question 0

Name some adjustments for AMT calculations

Answer 0

P - passive losses +
A - accelerated depc. post 1986 +
N - net operating loss individual +
I - Installment sales by dealer +
C - contracts % completion vs completed +
T - taxes (property, state & local, real estate) +
I - interest on home not used for house +
M - medical expenses not over 10%+ (2.5% if applicable)
M - miscellaneous expenses 2% +
E - exemptions personal and standard +

Question 1

State the AMT fouls and the tax rate

Answer 1

Regular taxable income 
\+\- adjustment
\+ preferences
= AMTI
- exemption 
= AMTB
x tax computation (26% up to $179,500 and 28% on excess)
= tentative AMT
- tax credits (FACCE)
= 
- regular tax
= AMT

AMT credit can only offset regular tax not AMT

Question 2

Name some preference items for AMTI calculations

Answer 2

• Private activity bonds interest income
• Percentage depletion
• Per 1987 accelerated depreciation difference from straight line

Question 3

What credits are allowed against AMT?

Answer 3

F - foreign income credit
A - adoption credit 
C - child tax credit
C - contribution to retirement credit
E - earned income credit

Question 4

What is the statute of limitation for an assessment?

Answer 4

3 years for normal
6 years for 25% income understatement
Unlimited for fraud

From the later of:
Due date or filing date

Question 5

What is the statute of limitation for refund?

Answer 5

The later of:
3 years from due date or filing date
2 years from time tax was paid if no return was filed

Question 6

Who must make estimated tax payments?

Answer 6

1. Anyone who owes $1,000 or more tax liability and the taxpayers withholding is less than the lesser of 90% of current year’s tax or
2. 100% of last year’s tax (110% if AGI over $150,000, $75,000 if MFS)