Question

5) If the Regular Taxable Income of a married couple is $292,000, show whether their computation of Alternative minimum taxable income would be affected by any of the following – charitable contributions $12,000, interest income of $850, property taxes of $8,100, Personal exemptions claimed of $24,000. Report whether these would be additions to or subtractions from their regular taxable income in computing AMTI.

Answer 1

Charitable contributions are allowed under AMT, thus won't be added back for calculating AMTI.

Interest income from private activity bonds that are exempt from tax are includable in calculation of AMTI. Thus the inclusion of interest income in AMTI depends on the source of such interest income.

Property tax is allowable under AMT and thus is not required to be adjusted for calculating AMTI.

Personal Exemption shall be added back while calculation of AMTI as there is separate calculation of exemption given under AMT based on the calculated AMTI. If the AMTI of a married couple filing jointly is not over $1,020,600 then Exemption is $111,700.