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liability is computed without reference to that negative tax
preference item.
Section 55(a) imposes an AMT on noncorporate taxpayers equal
to the excess (if any) of the tentative minimum tax for the
taxable year over the regular tax. 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) provides
that for noncorporate taxpayers the tentative minimum tax is
26 percent of so much of the AMTI as exceeds the exemption
amount. The exemption amount for individuals filing jointly is
$49,000 subject to a phaseout reduction equal to 25 percent of
the amount by which AMTI exceeds $150,000. Sec. 55(d)(1)(A)(i),
(3)(A). There appears to be no dispute between the parties with
respect to these fundamental computational principles.
Section 55(b)(2) 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 amount
of the items of tax preference described in section 57. Section
56(b)(1)(A) provides, in general, that in determining a
taxpayer’s AMTI, no deductions shall be allowed for miscellaneous
itemized deductions and State and local taxes paid. Also, no
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Last modified: May 25, 2011