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amiown
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Joined: 26 Aug 2007
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Posts: 90

Posted: 25 Aug 2008 at 15:11 \| IP Logged

hi all
Mitch, who is single and has no dependents, had AGI of $100,000 in 20X0. His potential itemized deductions were as follows:

   Medical expenses
   (before percentage limitation)   $15,000
   State income taxes   $   3,000
   Real estate taxes   $   7,000
   Mortgage (qualified housing
   and residence) interest   $   9,000
   Cash contributions to various
   charities   $   4,000
   Unreimbursed employee expenses
   (before percentage limitation)   $ 4,300

What is the amount of Mitch's AMT adjustment for itemized deductions for 20X0?

Ans.14,800.
Somebody plz help me with this.
Thanks

snowing1981
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Regular

Joined: 19 Nov 2007
Location: United States
Online Status: Offline
Posts: 23

Posted: 25 Aug 2008 at 16:56 \| IP Logged

AMT does not allow state tax, real estate tax, misc itemized deduction (subtject to 2%) and medical expense will subject to 10% instead of the regular 7.5%

Medical:

Regular deduction: 15000 - (7.5%*100000) =7500

AMT deduction: 15000 - (10%*100000) = 5000

Adjustment: unfavorable 2500

State income tax and real estate : disallowed for AMT

Adjustment: unfavorable 10,000

Misc deduction:

4,300 - (100000*2%) = 2300

adjustment: unf. 2300

Total adjustment is 14,800. My exam is on this Friday, it's a good review for myself here, didn't know ATM adjustment includes real estate tax, i thought only state income tax.

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amiown
Contributor

Joined: 26 Aug 2007
Online Status: Offline
Posts: 90

Posted: 25 Aug 2008 at 17:01 \| IP Logged

thanks a lot.............Mine is on Wednesday. Really worried.

amiown
Contributor

Joined: 26 Aug 2007
Online Status: Offline
Posts: 90

Posted: 25 Aug 2008 at 17:08 \| IP Logged

Hey plz explain what's the amount of AMT adjustment here
Just want to clarify.

Robert had current-year adjusted gross income of $100,000 and potential itemized deductions as follows:

Medical expenses (before percentage limitations)   $12,000
State income taxes   4,000
Real estate taxes   3,500
Qualified housing and residence mortgage interest   10,000
Home equity mortgage interest (used to consolidate personal debts)   4,500
Charitable contributions (cash)   5,000

What are Robert's itemized deductions for alternative minimum tax?
Thanks

snowing1981
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Regular

Joined: 19 Nov 2007
Location: United States
Online Status: Offline
Posts: 23

Posted: 25 Aug 2008 at 17:13 \| IP Logged

He can take medical to the extent exceeds 10% of AGI, mortgage interest and charitable contribution. I donlt think he can take the home equity interest since it is not used for house , but for his personal debt instead. Do you have an answer? i think total should be 2000 + 10000+5000 = 17000

__________________
BEC - 10/24/07 - 88
FARE - 2/18/08 - 93 - rec'd 3/18/08
Auditing - 2/28/08 - 83 - rec'd 3/20/08
Reg - 8/29/08 - 89 - rec'd 9/16/08
GA Board

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