I:14-45 AMT Adjustments and Computation of Tax. Allen, a single taxpayer, reports the following items on his 2007 federal income tax return:
Adjusted gross income $75,000
Taxable income 48,000
Regular tax liability 8,424
Tax preferences 20,000
Itemized deductions including:
Charitable contributions 7,500
Medical expenses (before AGI floor) 10,000
Mortgage interest on personal residence 10,000
State income taxes 5,000
Real estate taxes 8,000
a. What is the amount of Allen's AMT adjustments related to the itemized deductions?
b. What is Allen's AMT liability for the current year?
Referring to a Form 6251 for 2007, the following amounts would be entered:
Line 1 $40,125
Line 2 1,875
Line 3 13,000
The solution gives the answers for amounts to be entered on specific lines of the Form 6151 for 2007 for Allen. Following are the explanations for amounts on each line.