Arthur Wesson, an unmarried individual who is age 58, reports taxable income of $510,000 in 2021. He reports positive AMT adjustments of $80,000 and preferences of $35,000. Arthur itemizes his deductions, and his regular tax liability in 2021 is $153,044.

Click here to access the exemption table.

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a. Arthur's initial AMT exemption amount for 2021 is $????, since his filing status is single. However, the exemption is

increased/phased out

at a rate of 25 cents on the dollar when AMTI exceeds $???. Therefore, Arthur's total AMT exemption will be $???.

A graduated, two-tier AMT rate schedule applies to individual taxpayers. A

26%33%35%26%

rate applies to the first $199,900 of the AMT base, and a

15%28%33%28%

rate applies to the AMT base in excess of $199,900.

Compute Arthur's AMT for 2021.

Arthur's taxable income (before personal exemption)	????
Less/Plus
AMT credit/Positive AMT adjustments/	????
Less/Plus
AMT credit/Tax preferences	???
Equals: AMTI	???
Less:
Exemption/Positive AMT adjustments/Tax preferences	???
Equals: AMT base	???
Tentative AMT	???
Regular income tax liability	$153,044
AMT	???

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b. What is the total amount of Arthur's tax liability? $fill in the blank 4c06c9035014069_1

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c. Complete the e-mail explaining to Arthur why he must pay tax in excess of the regular tax liability.

From: Samantha Ash (SAsh@swft.com) Sent: February 4, 2022 To: Arthur Wesson (AWesson@FederalWest.com) Subject: 2021 income tax liability

Dear Mr. Wesson:

We have calculated your total Federal tax liability for 2021 to be $fill in the ???. This consists of the regular tax liability of $153,044 and the alternative minimum tax (AMT) liability of $???

Because this is the first year you have been subject to the AMT, I thought I should comment on this additional tax. The calculation of the AMT appears on Form 6251. The AMT

is/is not

a parallel income tax system. Its purpose is to provide assurance that no taxpayer with substantial economic income can avoid significant tax liability by using exclusions, deductions, and credits. As indicated on Form 6251, some of the exclusions and deductions that are part of your regular taxable income are

allowed/disallowed

as a part of the AMT calculation. These items increase your regular taxable income amount and, as a result, subject you to AMT in the current tax year.

I would like to work with you to minimize your AMT in the future. Because this is our first year to do tax compliance work for you, we may be able to incorporate some tax planning to reduce your Federal tax liability. Please e-mail me to schedule a meeting.