CFP

AAA

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.

Preferences and Adjustments
comments powered by Disqus
Related Articles
  1. Another Sound Lesson In Risk Management
    Investing News

    Another Sound Lesson In Risk Management

  2. Choosing The Right ETF Index To Reach ...
    Investing News

    Choosing The Right ETF Index To Reach ...

  3. Using Normal Distribution Formula To ...
    Investing Basics

    Using Normal Distribution Formula To ...

  4. Hypothesis Testing in Finance: Concept ...
    Active Trading Fundamentals

    Hypothesis Testing in Finance: Concept ...

  5. Top 6 Ways To Recession-Proof Your Job
    Personal Finance

    Top 6 Ways To Recession-Proof Your Job

Trading Center