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IV. Alternative Minimum Tax
Alternative minimum taxable income $90,678.23
Less: Exemption amount -45,000.00
Taxable excess 45,678.23
Times: Applicable AMT rate x 26%
Tentative minimum tax 11,876.34
Less: Regular tax -7,620.00
Alternative minimum tax 4,256.34
Petitioners’ taxable income for 1998 was $46,852.24, the
amount reported on line 39 of Form 1040.
As relevant herein, the adjustments provided in section
56(b) include the disallowance of the following: (1)
Miscellaneous itemized deductions as defined in section 67(b);
(2) taxes described in paragraph (1), (2) or (3) of section
164(a); and (3) personal exemptions defined in section 151.
Secs. 56(b)(1)(A)(i) and (ii), (E). Any amount refunded by way
of taxes paid that is includable in computing adjusted gross
income is not subject to disallowance. See sec. 56(b)(1)(A).
After we take into account the foregoing adjustments,
petitioners’ AMTI for 1998 equals $90,678.23. AMTI exceeds the
applicable exemption amount of $45,000 by $45,678.23. See sec.
55(d)(1)(C)(i). Petitioners’ “tentative minimum tax” is
therefore 26 percent of the excess, or $11,876.34. See sec.
55(b)(1)(A)(i)(I), (iii). Because petitioners’ tentative minimum
tax exceeds the regular tax of $7,620, petitioners are liable for
the alternative minimum tax in the amount of the excess; i.e.,
$11,876.34 less $7,620, or $4,256.34. See sec. 55(a).
In view of the foregoing, we hold that petitioners are
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