Question

Alternative tax itemized deductions (ATIDs) for individuals do not include a. miscellaneous itemized deductions. b. itemized deductions relating to the payment of any tax. c. medical expenses. d. both a and b. e. all of the above.

Answer 1

Answer : d. both a and b

Reason : As per US code 56(b)(1)(A), Two itemized deductions are totally disallowed for AMT (ATIDs) purpose

1. Miscellaneous itemized deductions (MIDs). For example unreimbursed employee business expenses and tax preparation expenses are not allowed for the AMT.

2. Itemized deductions related to the payment of any tax. For example state, local and foreign income taxes and real and personal property taxes are not allowed as deductions for AMT purposes.

As per US code 67(b), ATIDs generally include the following:

1. Medical expenses but only in excess of 10% of taxpayer's regular tax A.G.I.

2. Interest expense but only for:

A. Qualified housing interest

B. Investment interest expense to the extent of net investment income

3. Charitable contributions

4. Theft, casualty and wagering losses

5. Estate tax deductions resulting from reporting income in respect of a decedent under code 691

6. Impairment related work expenses

7. Bond premium amortization deductions.