In 2018, Liam's filing status is married filing separately. For regular tax purposes, he has three dependents. Liam does not itemize deductions; his regular taxable income is $456,000. What is Liam's 2018 AMT base?
A) $0.
B) $413,300.
C) $456,000.
D) $468,000.

Question

Quizplus · Accepted Answer

To calculate the AMT base, we need to make several adjustments to Liam's regular taxable income. First, we add back any items that were deducted for regular tax purposes but are not deductible for AMT purposes. Since Liam does not itemize deductions, this adjustment is $0. Second, we add back any personal exemptions that were allowed for regular tax purposes. However, personal exemptions are not allowed for AMT purposes, so this adjustment is also $0. Finally, we make adjustments for certain deductions and credits that are treated differently for AMT purposes. For example, the standard deduction is generally lower for AMT purposes, and several popular tax credits (such as the child tax credit) are not allowed or are reduced for AMT purposes. However, since we have no information suggesting that any of these adjustments apply to Liam, we assume they are also $0.

Therefore, Liam's AMT base is simply his regular taxable income of $456,000.

In 2018, Liam's Filing Status Is Married Filing Separately