Question

In: Accounting

In 2017, Juanita is married and files a joint tax return with her husband. What is...

In 2017, Juanita is married and files a joint tax return with her husband. What is her tentative minimum tax in each of the following alternative circumstances? (Input all values as positive. Leave no answer blank. Enter zero if applicable.)
Description Amount
(1) AMT base
(2) Dividends taxed at preferential rate
(3) Tax rate applicable to dividends 15 %
(4) Tax on dividends
(5) AMT base taxed at regular AMT rates
(6) Tax on AMT base taxed at 26% rate
(7) Tax on AMT base taxed at 28% rate
Tentative minimum tax

a. Her AMT base is $112,000, all ordinary income.

b. Her AMT base is $325,000, all ordinary income.

c. Her AMT base is $112,000, which includes $16,700 of qualified dividends.

d. Her AMT base is $325,000, which includes $16,700 of qualified dividends.

Solutions

Expert Solution

a)

Description Amount
AMT base 112000
Dividends taxed at preferential rate 0
Tax rate applicable to dividends 15%
Tax on dividends 0*15% =0
AMT base taxed at regular AMT rates 112000
Tax on AMT base taxed at 26% rate 112000*.26=29120
Tax on AMT base taxed at 28% rate 0
Tentative minimum tax 29120

b)

Description Amount
AMT base 325000
Dividends taxed at preferential rate 0
Tax rate applicable to dividends 15%
Tax on dividends 0*15% =0
AMT base taxed at regular AMT rates 325000
Tax on AMT base taxed at 26% rate 187800*.26=48828
Tax on AMT base taxed at 28% rate (325000-187800)*.28=38416
Tentative minimum tax 87244

c)

Description Amount
AMT base 112000
Dividends taxed at preferential rate 16700
Tax rate applicable to dividends 15%
Tax on dividends 16700*.15=2505
AMT base taxed at regular AMT rates 112000-16700=95300
Tax on AMT base taxed at 26% rate 95300*.26= 24778
Tax on AMT base taxed at 28% rate 0
Tentative minimum tax 2505+24778=27283

d)

Description Amount
AMT base 325000
Dividends taxed at preferential rate 16700
Tax rate applicable to dividends 15%
Tax on dividends 16700*.15=2505
AMT base taxed at regular AMT rates 325000-16700=308300
Tax on AMT base taxed at 26% rate 187800*.26= 48828
Tax on AMT base taxed at 28% rate (308300-187800)*.28=33740
Tentative minimum tax 85073

*Alternative minimum exemption for married filling jointly is 187800 for 2017

ekkarill92 answered 1 year ago
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