Mr.and Mrs.Reid reported $1,435,700 ordinary taxable income for regular tax purposes and had $158,200 positive AMT adjustments and preferences.Compute their tentative minimum tax.

Question

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To compute the tentative minimum tax (TMT), first calculate the Alternative Minimum Taxable Income (AMTI) by adding the positive AMT adjustments and preferences to the ordinary taxable income: $1,435,700 + $158,200 = $1,593,900. Then, apply the AMT tax rates: 26% on the first $194,800 and 28% on the excess. Calculate the tax: (0.26 * $194,800) + (0.28 * ($1,593,900 - $194,800)) = $442,396.

MrAnd MrsReid Reported $1,435,700 Ordinary Taxable Income for Regular Tax Purposes