Pat is 40, is single, and has no dependents. She received a salary of $390,000 in 2020. She earned interest income of $11,000, dividend income of $15,000, gambling winnings of $14,000, and interest income from private activity bonds (issued in 2016) of $40,000. The dividends are not qualified dividends. The following additional information is relevant.

State income taxes$8,100Real estate taxes4,000Mortgage interest on residence13,100Investment interest expense3,800Gambling losses5,100

a.Compute Pat's taxable income and AMTI.

Taxable Income ComputationAdjusted gross income$fill in the blank 28e86700c02dfc6_1

Itemized deductions

fill in the blank 28e86700c02dfc6_3

Taxable income$fill in the blank 28e86700c02dfc6_4

AMTI ComputationTaxable income$fill in the blank 28e86700c02dfc6_5

Add: itemized deductions adjustments

fill in the blank 28e86700c02dfc6_7

Add: income AMT preference items

fill in the blank 28e86700c02dfc6_9

AMTI$fill in the blank 28e86700c02dfc6_10

Feedback

The purpose of the AMT formula is to reconcile taxable income to AMTI. The reconciliation of taxable income to AMTI is accomplished by entering reconciling items to account for differences between regular income tax provisions and AMT provisions. These reconciling items are referred to as AMT adjustments or tax preferences.

b.Compute Pat's tentative minimum tax.

Computation of AMT Base and TaxAMTI$fill in the blank 1432aafe9fb2068_1

AMT exemptionfill in the blank 1432aafe9fb2068_2

AMT base$fill in the blank 1432aafe9fb2068_3

Tentative AMT$fill in the blank 1432aafe9fb2068_4