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file Form 6251, Alternative Minimum Tax--Individuals, or
otherwise report any AMT liability on their 1998 income tax
return.
In addition to the tax calculated under the normal rates, it
is sometimes necessary for a taxpayer to pay the AMT; petitioners
overlooked that their taxable year 1998 is one of those times.
Section 55(a) imposes the AMT on noncorporate taxpayers
equal to the excess of the “tentative minimum tax” over the
“regular tax” for the taxable year. The term “regular tax” means
the “regular tax liability for the taxable year (as defined in
section 26(b))”. Sec. 55(c)(1). Section 55(b)(1)(A)(i) provides
that the tentative minimum tax is 26 percent of so much of the
alternative minimum taxable income (AMTI) that does not exceed
$175,000 as exceeds the exemption amount of $45,000.
Section 55(b)(2)(A) and (B) defines AMTI as the taxable income of
the taxpayer for the taxable year--determined with the
adjustments provided for in sections 56 and 58, and increased by
the items of tax preference described in section 57. Section
56(b)(1)(A)(i) and (ii) and (E) provide that in determining a
taxpayer’s AMTI, no deductions shall be allowed for miscellaneous
itemized deductions (as defined in section 67(b)), State and
local taxes under section 164(a), and personal exemptions under
section 151. The effect of the AMT provisions is that those
deductions, which were allowed in computing petitioners’ taxable
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Last modified: May 25, 2011