[terranz]

AMT in 3 sources: ninja notes / Becker / Wiley

So I have looked over AMT many times, and it seems like AMT is presented the same in 3 diff sources, and at the same time it is different. And so at the end of it, I am royally confused.

Pardon the long write up – really hoping someone can clarify!

It seems like Ninja notes is the most simple, then becker, and then wiley is most detailed in their presentation of AMT. don’t know which to stick to.

Keep in mind, I’m not ragging on any source, I just want to understand AMT and LINE everything up in these notes (EVEN though I haven’t seen AMT before on exam day).

Individual AMT:

Ninja notes – lists some adjustments, but how do you know if you should add or subtract???

Becker says the exam usually focuses on 4 areas:

1. Exemption formula – what are the values for 2013??

2. Adjustments vs Prefs– there is a whole list of them (Panic Timme, where 7.5 vs 10.5% medical is Not applicable in 2013) vs. Preference items – always add backs, i get it (Ninja notes don’t mention these?)

3. AMT carryforward

4. Credits – foreign, adoption, children, contribution to retirement, earned income

I get, no deductions are allowed for state, local, personal taxes, and home mortgage interest if not used to buy/build/improve house.

Wiley has the same formula as Beckers.

For Corporate it’s more fun

In ninja we are taught:

Taxable income

+/- Adjustment

+Pref items

= Pre ACE

Pre-Ace

+/- adjustments (***Here, Wiley talks about ACE adj (75% of diff b/t pre-ace AMTI and ADJ current earnings, and also talks about AMT NOL deduction (limited to 90% of pre NOL AMTI – WHAT does this all REALLY mean???)

= AMTI

AMTI

<exemption>

Then multiply 20%

=tentative minimum tax

This is how I learned in Beckers

Regular TI

Adjust for:

LT contracts, installment sale dealer, excess depreciation

Addback:

Percentage depletion, private activity, pre87 ACRS depreciation

Adjusted Current earnings (+ or -)

Muni interest income, increase CSV insurance, Non S/L depreciation, Dividends Received deduction

<AMT NOL deduction>

= minimum taxable income

<AMT exemption>

= AMT

Multiply by 20%

=Gross AMT

(Rest of the formula not shown)

[jeff]

Think through it logically – if you took the deduction, then they want you to add it back to your taxable income.

[jeff]

Think through it logically – if you took the deduction, then they want you to add it back to your taxable income.

[Author]

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