Paul J. Pekar - Page 20




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                                      APPENDIX                                        
               The taxpayer's tentative minimum tax is computed as follows.           
          The taxable income, as it is normally calculated, is recomputed             
          to create a new tax base, the alternative minimum taxable income            
          (AMTI).  See sec. 55(b)(2).  The normal taxable income is reduced           
          by the adjustments provided for in sections 56 and 58 and                   
          increased by the amount of the items of tax preference described            
          in section 57.  In petitioner's case, the only applicable                   
          adjustment from these sections is the disallowance of the                   
          standard deduction and the personal exemption.  See sec.                    
          56(b)(1)(E).  Petitioner's regular taxable income was $155,599              
          and was increased by the previously allowed deduction of $5,750             
          and exemption of $7,926.  His AMTI was $169,275.                            
               The AMTI is then reduced by the special AMT exemption                  
          allowed according to the taxpayer's status.  See sec. 55(d).  For           
          taxpayers who are unmarried but not widowed, like petitioner, the           
          exemption amount is $33,750.  See id.  However, the exemption               
          amount is phased out if the AMTI exceeds a certain amount.  For             
          unmarried, not widowed, individuals, 25 percent of income                   
          exceeding $112,500 is subtracted from the exemption amount.  See            
          id.  Petitioner's AMTI exceeded $112,500 by $56,775.  Twenty-five           
          percent of that is $14,194, so petitioner's $33,750 exemption is            
          reduced to $19,556.                                                         





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