11. In 1995, Ivan’s grandfather died and left a portfolio of municipal bonds. Ivan still owns these bonds, and in 2010 they pay Ivan $50,000 in tax-free interest. Since the bonds are private activity bonds, the $50,000 is a tax preference for purposes of the alternative minimum tax (AMT). Assume for Chapters 6, 7, and 8 that Ivan’s federal income tax withholding from his wages is $12,000, not $6,000.

Required: Combine this new information about the Incisor family with the information from Chapters 15 and complete a revised 2010 tax return for Ivan and Irene. Be sure to save your data input files since this case will be expanded with more tax information in later chapters.

Please note: This problem requires the calculation of alternative minimum tax (AMT).

The home equity interest of $900 on the purchase of an automobile is not deductible for AMT (see line 4 of Form 6251). Please also note that page 2 of Form 6251 must be filled-in to calculate the lower AMT amount on qualified dividends.