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    Alternative Minimum Tax

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    I need to find Bubba's AMT adjustments related to the itemized deductions as well as find his AMT tax liability for the current year. His info is as follows:

    AGI $75,000
    Taxable income $50,000
    Regular tax liability $8,558
    Tax preferences $21,000
    Itemized deductions including:
    Charitable contributions $7,000
    Medical expenses (before AGI floor) $11,000
    Mortgage interest on personal residence $12,000
    State income taxes $6,000
    Real estate taxes $9,000

    Thank you

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    Solution Preview

    Assuming that Bubba is a single individual:
    The following items are positive adjustments for AMT, and that means that they will be added back into income for AMT purposes: *Tax preferences ($21,000),* medical expenses as the difference between the 7.5 % and 10% allowable under AMT(11,000 - 75,000*.075) (11,000 - ...

    Solution Summary

    This solution contains a calculation of the Alternative Minimum Tax for an individual.