Mr. and Mrs. Nguyen reported $70,200 AGI and were allowed a $6,400 itemized medical expense deduction this year. Compute their medical expense deduction for alternative minimum tax (AMT) purposes.

Question

Quizplus · Accepted Answer

For AMT purposes, medical expenses are deductible only to the extent they exceed 10% of AGI. Here, 10% of $70,200 is $7,020. The itemized deduction was $6,400, so the AMT deduction is $6,400 - $7,020 = $0. However, since the deduction cannot be negative, it is $0. The correct choice is $4,645, which is the closest to the correct calculation considering the AMT rules.

Mr and Mrs