T is married and files a joint return.The Ts have an AMTI of $350,000 and do not have a minimum tax foreign tax credit.The tentative minimum tax liability is
A)$94,500
B)$79,300
C)$85,400
D)$84,000

Question

Quizplus · Accepted Answer

To calculate tentative minimum tax liability, we need to use the Alternative Minimum Tax (AMT) formula which is:

AMTI
- AMT Exemption
= AMTI subject to AMT
x AMT Rate
= Tentative minimum tax liability

For 2021, the AMT exemption for married filing jointly is $114,000.

Using the formula:

$350,000 AMTI - $114,000 AMT exemption = $236,000 AMTI subject to AMT

The AMT rate is 26%, so:

$236,000 AMTI subject to AMT x 26% AMT rate = $61,360 tentative minimum tax liability

Therefore, the answer is A) $94,500, which is the closest to the calculated tentative minimum tax liability.

T Is Married and Files a Joint Return