Question

234. Alejandro is a married taxpayer and he files a joint return. His adjusted gross income after deductions in 2019 is $250,000. The deductions that he needs to add back in for AMT purposes are $6,000 in state and local taxes and $4,000 in personal property taxes. Based on Alejandro’s alternative minimum taxable income (AMTI) of $260,000, he is entitled to subtract the what amount of the AMT exemption to arrive at his final taxable amount?

A. $0

B. $54,700

C. $82,050

D. $111,700

Answer 1

Ans: The correct option for the answer is option D i.e. $111,700

Alternative Minimum Tax Exemption limit was Increase to $111,700 who filed Joint Return and Their Earlier Phaseout Limit was Increased to $1.02 Million in 2019 from $1 million in 2018

Since Alejandro’s alternative minimum taxable income (AMTI) of $260,000 was in phase limit of 1.02 Million and His Exemption Limit i.e. $111,700 Matches the phaseout condition therefore  he is entitled to subtract the $111,700 amount of the AMT exemption to arrive at his final taxable amount

Also when calculating AMT income State and local Income Taxes Cannot be Deductible though they can be deductible from Regular Tax liability