Question

Bobbie, a single taxpayer, has taxable income of $70,000 and a regular tax liability of $11,340 in 2018.

Bobbie also has:

            Tax exempt interest on private activity bonds of $15,000 and

            Excess depletion expense over adjusted basis in natural resource of $23,000

            A claimed standard deduction for a single individual

The single taxpayer AMT basic exemption is $70,300 and the phase-out income threshold of $500,000

AMT tax rates are 26% on first $191,100 of taxable income and 28% on any excess.

Compute the Alternative Minimum Tax.

Be sure to show

1. AMTI
2. Exemption amount,
3. AMT tax base as well as
4. AMT

Answer 1

Particulars	Amount	Amount
Regular taxable income		70,000
Add:
Standard deduction if claimed		12,000
Tax exempt interest		15,000
Excess depreciation		23,000
AMTI		120,000
Less AMT exemption
Exemption available	70,700
Phase out lower limit of AMTI	500,000
Excess amount	-
Phase out amount	-
Exemption amount	70,700	70,700
AMT base		49,300
Tentative minimum tax		12,818
Regular tax		11,340
AMT		1,478

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