LO.3 Wolfgang’s AGI is $125,000. He has the following itemized deductions for 2012:

Medical expenses [$15,000 − (7.5% × $125,000)] $ 5,625 State income taxes 4,200 Charitable contributions 4,000 Home mortgage interest on his personal residence 8,000 Casualty loss (after $100 and 10% reductions) 1,800 Miscellaneous itemized deductions [$3,500 − 2%($125,000)] 1,000

$24,625

a. Calculate Wolfgang’s itemized deductions for AMT purposes.

b. What is the amount of the AMT adjustment?