- 4 - Respondent computed the AMT in the following manner: Form 1040, line 39 $18,6311 plus: adjustments and preferences (1) medical/dental expenses 2,0212 (2) State/local income taxes 32,099 (3) real estate taxes 20,445 alternative minimum taxable income 73,196 less: exemption amount -49,000 taxable excess 24,196 applicable AMT rate 26% tentative minimum tax 6,291 less: regular tax3 - 963 AMT $ 5,328 1 Line 39 of Form 1040 represents adjusted gross income less itemized deductions as reported by petitioners on their return. Line 39 precedes the line on which personal exemptions are claimed; thus, the AMT computation effectively serves to disallow all personal exemptions. 2 Medical expenses in excess of 7.5 percent, but less than 10 percent, of adjusted gross income as reported by petitioners on their return. 3 As reported by petitioners on line 55 of their return. Although respondent’s computation of the AMT in the notice of deficiency refers to “adjustments and preferences”, petitioners did not have any “items of tax preference” within the meaning of that term as defined by section 57. Petitioners filed a petition challenging respondent’s deficiency determination. Petitioners contend that the AMT should not apply to them under the circumstances of their case, and they ask for a waiver from such tax on equitable grounds. In this regard, petitioners point out that they had no items of tax preference in 2002. Petitioners also point out that they are neither wealthy nor the high-income taxpayers for whom the AMTPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011