Robin,who is a head of household and age 42,provides you with the following information from his financial records for 2017.Robert itemizes deductions.

Calculate Robin's AMT for 2017.
A)$6,633.
B)$13,332.
C)$48,828.
D)$54,428.

Question

Robin,who is a head of household and age 42,provides you with the following information from his financial records for 2017.Robert itemizes deductions.
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Calculate Robin's AMT for 2017.
A)$6,633. 
B)$13,332. 
C)$48,828. 
D)$54,428.

Quizplus · Accepted Answer

To calculate Robin's AMT, we need to first calculate his alternative minimum taxable income (AMTI).

Starting with his adjusted gross income (AGI) of $150,000, we add back various deductions and adjustments to arrive at his AMTI:

AGI: $150,000
Itemized deductions: $30,000 (limited to 80% of AGI)
State and local taxes: $15,000 
Personal exemptions: $0 (eliminated under the AMT)
Standard deduction: $0 (not used under the AMT)
Tax-exempt interest: $0 (not used under the AMT)
Adjusted AMTI: $195,000

Next, we apply the AMT tax rates and exemptions to arrive at his tentative AMT:

First $191,100 of AMTI: taxed at 26% = $49,686
Remaining AMTI ($195,000 - $191,100): taxed at 28% = $10,920
Total tentative AMT: $60,606
Less AMT exemption amount ($84,500): -$84,500
Final AMT: $13,332

Therefore, the best choice is B.

Robin,who Is a Head of Household and Age 42,provides You