Alternative Minimum Tax - Preferences and Adjustments
Preferences and Adjustments
Positive and negative AMT adjustments are added or subtracted from regular taxable income to determine the "taxable income after AMT adjustments." Tax preference items are then added to get your AMTI. The following is a list of AMT adjustments:
Adjustments for AMT (deductions not allowed):
- Standard deduction and personal exemptions
- Certain itemized deductions
- Mortgage interest
- Medical expenses
- Miscellaneous deductions
- Investment interest
- MACRS depreciation
- Basis adjustment affects AMT gain or loss
- Incentive stock options (ISO)
- Mining exploration and development costs
- Circulation costs
- Long-term contracts
- Research and experimental procedures
- Passive tax-shelter farm losses
- Passive losses from non-farming activities
Certain tax preference items must be added back into taxable income after AMT adjustments to determine the AMTI. These primary items include the following:
AMT Preference Items (Must Know These):Exclusion Items Vs. Deferral Items
- Tax-exempt interest on private-activity municipal bonds
- Percentage Depletion / Excess intangible drilling costs (IDC)
- Depreciation (ACRS/MACRS)
- Exercise of an Incentive Stock Option (Bargain Element)
Options & FuturesThat depends on the type of stock option you have. A rundown of the tax treatment for statutory and nonstatutory, or non-qualified, options.
TaxesInvestment expenses can be deducted by those who meet three main criteria. Here's what they are and how they work.
TaxesTaxable income is the net of gross income and allowable deductions.
TaxesApril and taxes are due soon. If you need to file your return, you might have to decide if itemizing your deductions this year will net you a better deal.
TaxesFind out how your accounts are taxed and which forms you need.
TaxesDon't pay more taxes than you have to because you've missed taking legitimate tax deductions. Here are just a few you may have overlooked.
TaxesThe first step in completing your taxes is calculating your adjusted gross income. Here’s how.
TaxesMost U.S. taxpayers will be familiar with the 1040. By the end of filling it out, you'll know how much tax you owe, or what your refund is.
Financial AdvisorsAn overview of tax breaks for those who pay medical insurance premiums.
TaxesIf you want to pay as little as possible in taxes, it's important to learn about all the different credits and deductions available. Here's a primer.
A tax calculation that adds certain tax preference items back ...
A type of income, normally tax-free, that may trigger the alternative ...
A tax form distributed by the Internal Revenue Service (IRS) ...
The excess of deductions allowed over the income recognized for ...
A deduction from a taxpayer's taxable adjusted gross income that ...
Schedule A is a U.S. income tax form that is used by taxpayers ...
Learn how the most important benefits incurred from growth investments are appreciation, compounding and a range of tax deductions. Read Answer >>
Taking the standard deduction is the easiest and most common method chosen by filers, but many taxpayers may wind up paying ... Read Answer >>
Understand what deductions, exemptions and tax credits are dependent on the gross income calculation and how these determine ... Read Answer >>
Each deduction that you claim may result in a decrease in the amount of taxes that you owe. However, whether you receive ... Read Answer >>
Learn what adjusted cost basis is, how it is calculated, and why this metric is important for investors, business owners ... Read Answer >>
Find out how your health insurance deductible is treated for tax purposes and under what conditions you may be able to deduct ... Read Answer >>