Part 1: Discuss what is meant by Alternative Minimum Tax (AMT).

Part 2: Explain how the following items will be treated for AMT purposes:

Tax-exempt interest income (e.g., municipal interest received from the investments in state and city bonds)

Deductions of medical expenses on Schedule A

Deductions of state income tax on Schedule A

Deduction of property tax on Schedule A

Part 3: Discuss at least three types of income items which are not taxable and are not reported on the tax returns.

Part 4: Hassan made the following comment: Taxpayers are never allowed to deduct capital loss against ordinary income. Do you agree with his statement? Why and why not?

Part 5: Can companies deduct capital loss against their ordinary income? Do you think corporations pay preferential tax rates on long-term capital gains?

Part 6: You heard Syed making a speech. Excerpts from his speech included the following:

If you have income from your salary (ordinary income), or from a business, you can pay as high as 39.6% tax on part of your income; however, if you have long-term capital gains, you only pay 15% maximum on such gains. Income is income! Government should not tax capital gains favorably. That is why Warren Buffets average tax rate was less than his secretary.

Do you agree with Syed? Why or why not