Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need help figuring out the computation of AMTI. Ive filled in what I know, I just dont understand how to do the AMTI portion.

I need help figuring out the computation of AMTI. Ive filled in what I know, I just dont understand how to do the AMTI portion.

Lynn, age 45, is single and has no dependents. Her income and expenses for 2019 are reported as follows.

Income

Salary

$233,000

Taxable interest on corporate bonds

13,700

Business income

64,000

Expenses

Home office expense deduction (associated with sole proprietorship)

3,200

State income taxes

6,000

Real property taxes

8,500

Home mortgage (qualified housing) interest

9,200

Home equity loan interest

2,500

Investment interest

15,500

Cash contributions to various charities

2,900

The $64,000 business income is from Apex Office Supplies Company, a sole proprietorship that Lynn owns and operates. Apex claimed MACRS depreciation of $3,175 on personal property used in the business and placed in service in the current year. Lynn received interest of $30,000 on City of Pensacola private activity bonds that were issued in 2013.

Based on the financial information presented above, compute Lynn's AMT for 2019. Ignore the one-half deduction for self-employment taxes for this problem.

Gross income

$ 310700

Less: deductions for AGI

3200

Adjusted gross income

$ 307500

Less: deductions from AGI

35800

Taxable income

$ 271700

Regular income tax calculation

Total tax

$ 70784.50

Computation of alternative minimum tax

Taxable income

$

Plus: positive adjustments and tax preferences

Less: negative adjustment

Alternative minimum taxable income

Less: AMT exemption

71700

AMT base

$

TMT

$

AMT

$

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Big Tech In Finance

Authors: Igor Pejic

1st Edition

139860898X, 978-1398608986

More Books

Students also viewed these Finance questions