Question

Ashby, who is single and age 30, provides you with the following information from his financial...

Ashby, who is single and age 30, provides you with the following information from his financial records for 2020.

Regular income tax liability $78,045
AMTI 525,000
Taxable income 295,000


Calculate his AMT exemption for 2020.

a.$1,650

b.$0

c.$72,900

d.$71,250

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Answer #1

Answer : Option C - $72900 is Ashby's AMT Exemption for 2020.

AMT(Alternative Minimum Tax) Exemption is substract from AMTI (Alternative Minimum Taxable Income) to Alternative Minimum Tax. if AMT is More than Regular Tax then, Taxpayer has to pay AMT and if Regular tax is more than AMT then, Taxpayer has to pay Regular tax. $72,900 is maximum Exemption available to individual (single) & $113400 for married couples.

NOTE : Option- d is wrong because this amount of exemption available in 2019.

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