Alternative Minimum Tax - Common Items Subject to the Alternative Minimum Tax

Common Items Subject to the Alternative Minimum Tax (AMT):

  • Tax-exempt interest from Private Activity Bonds
  • Gain on Small Business Stock qualifying for exclusion
  • Intangible Drilling Costs
  • Passive Income or Loss
  • Investment Expenses
  • Depletion
  • Personal Exemptions
  • Standard deduction
  • Mining Exploration & Development Costs
  • Income from exercising incentive stock options
  • Accelerated Depreciation in excess of straight line
  • Itemized deductions for taxes, miscellaneous and medical expenses

Calculation of the AMT:

Regular Taxable Income
(+) Positive AMT Adjustments
(-) Negative AMT Adjustments
(=) Taxable Income after AMT Adjustments
(+) Tax Preferences
(=) Alternative Minimum Taxable Income (AMTI)

AMTI
(-) AMT Exemption
(=) Minimum Tax Base
(x) AMT Rate
(=) Tentative AMT
(-) Regular income tax on taxable income
(=) AMT

AMT Tax Rates
26% Rate - applies to AMT taxable income of $182,500 or less (after the AMT exemption), $91,250 or less if married filing separately.
28% Rate - applies to AMTI exceeding the $182,500 or $91,250 threshold.

AMT Exemption Amounts
 

Filing Status Exemption Amount 2014 Phaseout*
Married/Surviving Spouse $82,100 $156,500+
Single $52,800 $117,300+
Married, filing separately $41,050 $  78,250+

*The exemptions are phased out by 25% of the excess of AMTI over the listed amount.
 

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