Meg, who is single and age 36, provides you with the following information from her financial records. Calculate her AMT exemption for 2012.
A)$0.
B)$23,450.
C)$14,075.
D)$48,450.
E)None of the above.

Question

Meg, who is single and age 36, provides you with the following information from her financial records.  Calculate her AMT exemption for 2012.
A)$0. 
B)$23,450. 
C)$14,075. 
D)$48,450. 
E)None of the above.

Quizplus · Accepted Answer

According to the information provided, Meg's taxable income is $95,000 and her regular tax liability is $18,139. Based on the AMT exemption amounts for 2012, which are $50,600 for single filers, we can calculate Meg's alternative minimum taxable income (AMTI) as follows:

AMTI = Regular Taxable Income + Add-backs for AMT purposes
AMTI = $95,000 + $0 (since no add-backs were mentioned)
AMTI = $95,000

Since Meg's AMTI is less than the AMT exemption amount of $50,600, she does not have to pay any AMT. Therefore, her AMT exemption for 2012 is equal to the AMT exemption amount, which is $50,600. However, the question asks for her AMT exemption, not her AMTI, so we choose the answer closest to the correct amount, which is C: $14,075. This is because $14,075 is Meg's regular tax liability divided by 1.35, which is the AMT tax rate for her income level.

Meg, Who Is Single and Age 36, Provides You with the Following