Mr. and Mrs. Luang reported $517,900 ordinary taxable income for regular tax purposes and had $39,100 positive AMT adjustments and preferences. Compute their tentative minimum tax.

Question

Quizplus · Accepted Answer

The tentative minimum tax is calculated by adding the positive AMT adjustments and preferences to the ordinary taxable income, then applying the AMT tax rates. The calculation is as follows: $517,900 + $39,100 = $557,000. The AMT tax rate is 26% on the first $194,800 and 28% on the excess. Therefore, $194,800 * 26% + ($557,000 - $194,800) * 28% = $152,252.

Mr and Mrs