Question

5-In 2019, Nadia has $100,000 of regular taxable income. She itemizes her deductions as follows: real property taxes of $1,500, state income taxes of $2,000, and mortgage interest expense of $10,000 (acquisition indebtedness of $200,000). In addition, she receives tax-exempt interest of $1,000 from a municipal bond (issued in 2006) that was used to fund a new business building for a (formerly) out-of-state employer. Finally, she received a state tax refund of $600 from the prior year. What is Nadia’s AMTI this year if she deducted $15,000 of itemized deductions last year (she did not owe AMT last year)?

6-Steve’s tentative minimum tax (TMT) for 2019 is $247,000. What is his AMT if his regular tax is $230,000?

Answer 1

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5. ans

DESCRIPTION	AMOUNT	EXPLAINATION
REGULAR TAXABLE INCOME	$100000
PRESONAL EXEMPTION	$3650
INTEREST	$1000
REAL ESTATE TAXES	$1500	NOT DEDUCTIBLE ON AMTI
STATE INCOME TAXES	$2000	NOT DEDUCTIBLE ON AMTI
STATE TAX REFUND	(600)
AMTI	$107550

Therefore, Nadia's AMTI this year if she deducted $15,000 of itemized deductions last year and did not owe any AMT last year is $107,550.

6.

(1) TENTATIVE MINIMUM TAX	$247000
(2)REGULAFR TAX LIABILITY	$230000
ALTERNATE MINIMUM TAX	$17000	(1) -(2)