Fella
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Joined: 19 Nov 2011
Location: United States
Online Status: Offline
Posts: 68
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| Posted: 16 Aug 2012 at 12:22 | IP Logged
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I cannot find answer to my question in the book, on this
forum, or on youtube.
I cannot understand the medical expenses for Alternative
Minimum Tax.
If medical expenses in excess of 7.5% of AGI were
deducted on a regular Schedule A do I take the difference
of 7.5-10% of AGI and add back?
I saw several examples that do this.
But then I did a multiple choice question where the
question was what is an AMT itemized deduction?
Medical expenses were $12,000 and the answer was AGI
100,000 (before any itemized deductions) x 10% = 10,000
12,000 - 10,000 = 2,000 itemized deduction for AMT.
Does it mean we have to separate medical expenses into
two parts:
1.An add back = 7.5-10% = difference is an add back
2.Itemized medical expense for AMT = AGI x 10% = e.g.
$10,000. Actual medical expense - $10,000 = itemized
deduction for AMT
In other words:
10% of AGI is an add back and everything beyond 10% is an
itemized deduction for AMT.
Thanks for your help
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Topic: Somebody please explain AMT
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