Gregory C. & Kristine J. Schick - Page 5

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          recomputation of taxable income, leading to a new tax base or an            
          alternative minimum taxable income.  Sec. 55(b)(2).  In making              
          the recomputation, and as relevant herein, certain (but not all)            
          itemized deductions are not allowed, nor is the personal                    
          exemption.  In particular, section 56(b)(1)(A)(ii) states that no           
          itemized deduction for State and local taxes shall be allowed in            
          computing alternative minimum taxable income.  Further, section             
          56(b)(1)(E) states that no personal exemptions shall be allowed             
          in computing alternative minimum taxable income.  Finally,                  
          section 56(b)(1)(F) states that section 68 (overall limitation on           
          itemized deductions) does not apply, therefore decreasing taxable           
          income by the amount of the section 68 reduction to itemized                
          deductions.                                                                 
               Petitioners do not dispute the computation of the AMT as               
          determined by respondent.  Petitioners nevertheless contend that            
          the AMT is confusing and complex, and they are unclear as to why            
          they are liable for the AMT, which effectively deprives them of             
          the benefit of some itemized deductions.  Petitioners also make             
          reference to recent proposals by Congress to repeal or modify the           
          AMT and criticism of the AMT by the National Taxpayer Advocate.             
               Congress established the alternative minimum taxable income            
          as a broad base of income in order to tax taxpayers more closely            
          on their economic income, intending for all taxpayers to pay                
          their fair share of the overall Federal income tax burden.  Allen           






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