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deduction is allowed for personal exemptions. Sec. 56(b)(1)(E).
The parties part ways in this phase of the computation.
Respondent calculated petitioners’ AMTI as follows:
Taxable income per return $147,194
Personal exemptions 13,200
State and local taxes paid 16,214
Unreimbursed employee expenses 30,542
Sec. 68(a) limitation
on itemized deductions (2,503)
Taxable State tax refund (1,544)
AMTI 203,103
Respondent’s computation does not take into account the $27,500
negative tax preference for intangible drilling costs petitioners
claimed on their Form 6251. Respondent allowed petitioners an
exemption under section 55(d)(1) of $35,724, which was based on
the $49,000 exemption amount subject to the phaseout reduction of
$13,276 (25 percent of the excess of $203,103 over $150,000).
Because petitioners’ AMTI of $203,103 exceeded the $35,724
exemption amount by $167,379, petitioners’ tentative minimum tax
was computed as 26 percent of the excess, or $43,519. Because
petitioners’ tentative minimum tax of $43,519 exceeds their
regular tax of $34,569, respondent determined that petitioners
are liable for AMT of $8,950.
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Last modified: May 25, 2011