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)
Mutual Funds & ETFsFind out about the Guggenheim BulletShares 2018 High Yield Corporate Bond ETF, and get information about this ETF that focuses on high-yield corporate bonds.
Mutual Funds & ETFsFind out about the PowerShares DWA SmallCap Momentum Portfolio ETF, and explore detailed analysis the fund's characteristics, suitability and recommendations.
Mutual Funds & ETFsLearn information about the ProShares Large Cap Core Plus ETF, and explore detailed analysis of its characteristics, suitability and recommendations.
Mutual Funds & ETFsFind out about the iShares Core Growth Allocation Fund, and learn detailed information about its characteristics, suitability and recommendations.
Mutual Funds & ETFsLearn about the Vanguard Total World Stock exchange-traded fund, which invests in stocks located in numerous countries with a high level of diversification.
Mutual Funds & ETFsLearn about the iShares MSCI USA Minimum Volatility exchange-traded fund, which invests in low-volatility equities traded on the U.S. stock market.
Mutual Funds & ETFsLearn about the iShares US Real Estate fund, which holds shares of equity and nonequity real estate investment trusts incorporated in the United States.
Mutual Funds & ETFsLearn about the SPDR Barclays Short-Term Corporate Bond ETF, and explore detailed analysis of the exchange-traded fund tracking U.S. short-term corporate bonds.
Investing BasicsOwning stocks may shortly become too scary for your portfolio. Here's why, and here are some alternatives.
Forex StrategiesWhat are the best strategies to avoid exchange rate risk when trading?
The amount of risk that an insurance company retains after subtracting ...
Coverage that provides financial protection to investors, financial ...
The maximum loss from a peak to a trough of a portfolio, before ...
The absolute level of a fund's investments.
A technique used by insurance companies to calculate loss reserves.
The financial benefit that a risk-taking activity will bring ...
The Federal Deposit Insurance Corporation, or FDIC, is a government-run agency that provides protection against losses if ... Read Full Answer >>
The rise of index trading may increase the overall vulnerability of the stock market due to increased correlations between ... Read Full Answer >>
The term delta refers to the change in price of an underlying stock or exchange-traded fund (ETF) as compared to the corresponding ... Read Full Answer >>
An investor who is overweight in a particular sector risks a loss in value for the portfolio if there is a downturn in that ... Read Full Answer >>
The retail sector consists of companies operating in multiple industries such as specialty retail, general retail, food and ... Read Full Answer >>
Like all equity investments, insurance companies present investors with market risk. Insurance companies, like banks, also ... Read Full Answer >>