[knicks92]

So going through my final review. Taking the exam this Friday and after studying for about a month full time, I think I am finally understanding individual AMT, which I thought was one of the harder concepts but actually is not too bad after all. The only question I have is for medical expenses:

I know that you deduct what is in excess of 10% of AGI, but for the AMT add backs, is there NO ADDBACK if the taxpayer is under 65 years old and there IS AN ADDBACK for taxpayers 65 and older in excess of 7.5% but not in excess of 10% of AGI (so basically 2.5% of AGI)???

If anyone can confirm this, that would be really helpful.

Tough times don't last. Tough people do.

B: 88
A: 77
R: 89
F:

[Son]

As far as I understand this, there is an add-back ONLY for taxpayers 65 and older. Those 2.5% of preferential treatment (difference between 7.5% and 10% of AGI “floor”) they receive under regular tax rules is disallowed for AMT purposes.

The way I'm thinking about this: under regular tax, older taxpayers receive an additional deduction for medical expenses because their AGI “floor” is decreased from 10% to 7.5%. But, AMT rules even up people under and over 65: everyone receives deduction for medical expenses that exceed 10% of their AGI. For older taxpayers this translates into an add-back: now 2.5% of medical expenses that were allowed as a deduction for regular tax purposes are effectively disallowed and need to be added back.

AUD - passed
REG - passed
BEC - passed
FAR - passed

[Author]

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