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):

  1. Standard deduction and personal exemptions
  2. Certain itemized deductions
  3. Mortgage interest
  4. Taxes
  5. Medical expenses
  6. Miscellaneous deductions
  7. Investment interest
  8. MACRS depreciation
  9. Basis adjustment affects AMT gain or loss
  10. Incentive stock options (ISO)
  11. Mining exploration and development costs
  12. Circulation costs
  13. Long-term contracts
  14. Research and experimental procedures
  15. Passive tax-shelter farm losses
  16. 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):
  1. Tax-exempt interest on private-activity municipal bonds
  2. Percentage Depletion / Excess intangible drilling costs (IDC)
  3. Depreciation (ACRS/MACRS)
  4. Exercise of an Incentive Stock Option (Bargain Element)


Exclusion Items Vs. Deferral Items

Related Articles
  1. Taxes

    How to Cut Your Alternative Minimum Tax

    Should you worry about the AMT? Even if you're subject to it, there are exemptions and strategies for reducing your tax bill.
  2. Taxes

    Can Trump Kill the Alternative Minimum Tax (AMT)?

    Getting rid of the AMT would be great for upper-middle class taxpayers.
  3. Taxes

    Cut Employee Stock Option Taxes With AMT Credit

    Learn how refundable AMT credits can help you save on taxes, AMT bills and more.
  4. Taxes

    End-of-the-Year Checklist to Save on Income Taxes

    From grouping related expenses to factoring in the alternative minimum tax, here are some things you need to keep in mind when doing tax planning.
  5. Taxes

    Valuable Year-End Tax Moves for 2016 (Part Three)

    Here's a look at tax strategies for itemized deductions, charitable gifts and other tax credits.
  6. Taxes

    Why You Should Itemize Your Tax Deductions

    This strategy of moving your tax deductable payments and donations to the following year could mean hundreds more on your return.
  7. Tech

    Top Tax Tips to Deduct Investment Management Fees

    Investment expenses can be deducted by those who meet three main criteria. Here's what they are and how they work.
  8. Taxes

    The Most Overlooked Tax Deductions

    The receipts you cram into your wallet could be replaced with cash come tax season.
  9. Taxes

    Increase Your Tax Refund With Above-The-Line Deductions

    Find out about these deductions and how you can use them to lower your tax bill.
  10. Taxes

    7 Tax Terms Explained

    As the tax season begins, there are certain words you need to know. Read on to see what they are.
Frequently Asked Questions
  1. Why is social responsibility important to a business?

    Take social responsibility seriously, and your business could benefit from happier, more productive staff members while helping ...
  2. Which socially responsible retailers appeal most to ethical investors?

    Learn why ethical investors have many options in the retail sector, and discover which retail companies are most popular ...
  3. What are Some Examples of Free Market Economies?

    Learn which of the world's economies best resemble free market economies, marked by free trade, low government involvement, ...
  4. Who Decides When to Print money in India?

    Find out the role of the Reserve Bank of India, or RBI, and the amount of authority given to the government. Learn who is ...
Trading Center