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Scenario $2$: NOL & Alternative Minimum Tax $($AMT$)$

Business $($sole proprietorship$)$ net loss: $($$$80,000)$

Prior Year NOL carryforward available: $$15,000$

Wages: $$320,000$

Interest and Dividend Income: $$3,000$

Significant Itemized Deductions:

State and Local Taxes: $$55,000$

Medical Expenses $($exceeds AGI thresholds$)$: $$40,000$

Charitable Contributions: $$25,000$

Allowable deduction for self$-$employment tax: $$25,000$

Questions:

Calculate the NOL deduction for the current year.

Calculate regular taxable income.

Calculate AMTI $($Alternative Minimum Taxable Income$)$ and potential AMT liability.

Analyze how the NOL deduction interacts with the Alternative Minimum Tax.