Cal reported the following itemized deductions on his 2016 tax return.His AGI for 2016 was $85,000.The mortgage interest is all qualified mortgage interest to purchase his personal residence.For AMT,compute his total itemized deductions.

A)$33,600.
B)$17,700.
C)$25,700.
D)$0.

Question

Cal reported the following itemized deductions on his 2016 tax return.His AGI for 2016 was $85,000.The mortgage interest is all qualified mortgage interest to purchase his personal residence.For AMT,compute his total itemized deductions.

A)$33,600. 
B)$17,700. 
C)$25,700. 
D)$0.

Quizplus · Accepted Answer

Starting with Cal's AGI of $85,000, we need to determine which of his itemized deductions are permissible for AMT purposes.

Medical expenses: $7,500 - This is allowable for AMT purposes.

State income taxes: $6,400 - This is not allowable for AMT purposes.

Real estate taxes: $3,800 - This is allowable for AMT purposes.

Mortgage interest: $13,000 - This is allowable for AMT purposes.

Charitable contributions: $1,000 - This is allowable for AMT purposes.

Total itemized deductions for AMT purposes: $7,500 + $3,800 + $13,000 + $1,000 = $25,300

Therefore, the closest answer choice is C ($25,700).

Cal Reported the Following Itemized Deductions on His 2016 Tax