Drake and Davina are married and file a joint return for 2016 with taxable income of $100,000 and tax preferences and adjustments of $51,000 for AMT purposes.Their regular tax liability is $16,533.What is the amount of their total tax liability?
A)$17,472
B)$39,260
C)$34,005
D)$16,533

Question

Quizplus · Accepted Answer

The AMT (Alternative Minimum Tax) is calculated by adding tax preferences and adjustments to taxable income, then applying the AMT exemption and rates. For 2016, the AMT exemption for married filing jointly is $83,800. The AMT income is $151,000 ($100,000 + $51,000). Subtracting the exemption, $67,200 is subject to AMT at 26%, resulting in $17,472. Since this is higher than the regular tax liability, it becomes the total tax liability.

Drake and Davina Are Married and File a Joint Return