Jackson sells qualifying small business stock for $125,000 (adjusted basis of $105,000)in 2013.In calculating gross income for regular income tax purposes,he excludes all of his realized gain of $20,000.The $20,000 exclusion is a tax preference in calculating Jackson's AMTI.

Question

Quizplus · Accepted Answer

In calculating Jackson's regular income tax,the amount of the 100% exclusion under § 1202 for qualifying small business stock is $20,000 ($20,000 realized gain × 100%).The amount of the AMT tax preference is $1,400 ($20,000 exclusion × 7%).

Jackson Sells Qualifying Small Business Stock for $125,000 (Adjusted Basis