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on petitioners' Form 1040, and this excess constitutes the AMT
determined in the notice of deficiency.
At trial, Rolly J. Sorrentino (petitioner) contended that
line 24 of the form is ambiguous as well as the instructions for
calculation of the amounts for that line.
The Court disagrees with petitioner. Section
55(b)(1)(A)(i)(I) and (II) provides, in pertinent part, that the
amount of the AMT in the case of noncorporate taxpayers is the
sum of:
(I) 26 percent of so much of the taxable excess as does
not exceed $175,000, plus
(II) 28 percent of so much of the taxable excess as
exceeds $175,000.
Since petitioners' taxable excess was $24,811, which is
considerably less than $175,000, the directions for line 24 of
the form in clear terms stated that petitioners' entry on line 24
should have been 26 percent of $24,811, and the $3,500 to be
subtracted from the resulting calculation only applied if
petitioners' taxable excess had been $175,000 or more. The Court
finds no ambiguity as to this entry or the basis upon which the
computation was to be made as directed on line 24 of the form.
Petitioners, therefore, erred in making their computation for the
entry on line 24.
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Last modified: May 25, 2011