In 2018, Janet and Ray are married filing jointly. Janet and Rays taxable income is $2,500,000, and they itemize their deductions as follows: state income taxes of $10,000, and mortgage interest expense of $25,000 (acquisition debt of $500,000). Use Exhibit 8-5 and Tax Rate Schedule for reference.

EXHIBIT 8-5 2018 AMT Exemptions
Filing Status	Exemption	Phase-Out Begins at This Level of AMTI	Phase-Out Complete for This Level of AMTI
Married filing jointly	$109,400	$1,000,000	$1,437,600
Married filing separately	$54,700	$500,000	$718,800
Head of household and single	$70,300	$500,000	$781,200

a. What is Janet and Rays AMT?

Janet and Ray's AMT-