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preference items set forth in section 57. To determine the
taxable amount of AMTI, the AMTI is reduced by an exemption
amount, which for a single taxpayer is $33,750, subject to a
gradual phaseout of the exemption amount as AMTI exceeds
$112,500. See sec. 55(d)(1), (3). The applicable AMT rates are
then applied to the AMTI, as reduced by the exemption amount, to
determine the tentative minimum tax (TMT). See sec. 55(b). If
the taxpayer reports capital gains on Form 1040, the TMT is the
lesser of (1) the amount of AMT determined without regard for
section 55(b)(3), or (2) the amount of AMT determined applying
the maximum rate of tax on net capital gains, pursuant to section
55(b)(3). The taxpayer’s regular income tax amount is then
compared to the TMT. If the TMT is greater than the regular
income tax, the difference is added to the regular tax amount to
determine the final tax liability for the taxable year. See sec.
55(a).
Petitioner does not dispute that he is subject to the AMT;
he simply argues that he has no AMT liability. Petitioner bases
his argument on his belief that the Code allows him to claim the
standard deduction for regular tax purposes and use his otherwise
allowable itemized deductions to compute his AMTI for AMT
purposes. Specifically, petitioner asserts that even though he
elected to claim the standard deduction for regular tax purposes,
he is entitled to use the full value of his itemized deductions
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