Jacob, age 42, and Jane Brewster, age 37, are married and file a joint return in 2015. The Brewsters have two dependent children, Ellen and Sean, 10-year-old twins.

Jacob is a factory supervisor; he earned $95,000 in 2015. Jane is a computer systems analyst and earned $103,000. In addition to their salaries, the Brewsters reported the following income items.

Interest income (Carmel Sanitation District Bonds)...................$22,000 (a)

Interest income (Carmel National Bank).......................................8,500

Qualified dividend income (Able Computer Corporation) .........12,000

Gambling winnings .......................................................................... 6,500

Gift from Uncle Raymond to Jacob ............................................. 27,000

"Citizen of the Year" award (Jane) .............................................. 7,500 (b)

Gain on land sale ........................................................................ 14,000 (c)

a. The Carmel Sanitation District Bonds are private activity bonds that were originally issued in April 2008.

b. Jane was selected "Citizen of the Year" by the Carmel City Council. She used the award proceeds to pay down the family's credit card debt.

c. Jacob sold 5 acres of land to a real estate developer on October 12, 2015, for $100,000. He had acquired the land on May 15, 2009, for $86,000.

On April 1, 2015, Jacob exercised an incentive stock option granted by his employer. At the date of exercise, the fair market value of the stock was $18 per share and the exercise price was $10 per share. Jacob purchased 500 shares with the ISO exercise. As of December 31, 2015, the stock's fair market value had declined to $13 per share.

The Brewsters incurred the following expenses during 2015.

Medical expenses (doctor and hospital bills) ......................... $28,000

Charitable contributions (cash) .............................................. 9,500 (d)

Real property tax on personal residence .............................. 8,100

Mortgage interest-personal residence (reported

on Form 1098) .......................................................................... 8,600

Mortgage interest-home equity loan .....................................1,800 (e)

Investment interest expense ...................................................3,500

Gambling losses ........................................................................6,800

d. In addition to their cash charitable contributions, the Brewsters contributed stock in Ace Corporation, which they acquired on February 9, 2005, at a cost of $6,500, to the Carmel Salvation Army, a qualifying charity. The fair market value of the stock was $11,000 on November 1, 2015, the date of the contribution.

e. The home equity loan was used to purchase the family's new minivan. Taking into consideration the above amounts, for 2015, the Brewster's AGI is $246,500 and taxable income is $178,150. The following table presents a first draft of the Brewsters' 2015 AMTI calculation.

Regular taxable income .................................................$178,150

Adjustments and preferences

Citizen of the Year award .................................................(7,500)

Reduction in medical expenses (10% of AGI for AMT) ....6,163

Real property taxes .......................................................... (8,100)

Mortgage interest ............................................................ 10,400

Charitable contribution of stock (difference between

basis and FMV) .................................................................... 4,500

Incentive stock option exercise ......................................... 1,000

Gambling loss disallowed for regular tax purposes ........ (300)

AMTI ................................................................................$184,313

Exemption amount ..........................................................(77,047)

AMTI base ................................................................ ......$107,266

Review the AMTI calculation, and prepare a list, including explanations, of any errors in the calculation. An error could include a missing amount or an amount that should not have been included, an amount that enters the calculation in the wrong direction, or an amount that enters the calculation in the wrong amount. You can presume that the Brewsters' AGI and taxable income amounts for 2015 are calculated correctly.