[Anonymous]

Farr, an unmarried taxpayer, had $70,000 of adjusted gross income and the following deductions for regular income tax purposes:

Home mortgage interest on a loan to acquire a principal residence $ 11,000

Miscellaneous itemized deductions above the threshold limitation 2,000

What are Farr’s total allowable itemized deductions for computing alternative minimum taxable income?

a.

$0

b.

$13,000

c.

$2,000

d.

$11,000

My answer is 2000. cos home mortgage interest used to buy a residence is not an add back, and miscellaneous deductions is an add back. why is the correct answer d 11,000? i don’t get it.

Some one please help! thanks!!

[pia ach]

Thanks taxgeek..yes you are right, i went back to my notes. i was thinking misc deductions above 2% are added back, well it is not allowed..PANIC TIME ..i got everything jumbled up in my head ..thanks again i was going nuts over this.

Finally done!!! Experience-pending. Ethics- Pending.
Reg 78 / 73/82.
Aud 74/89.
BEC 72 /78.
FAR 74/ 73/ 82.

[taxgeek83]

No problem! Do a few more problems if you have them – once you start seeing patterns you'll figure it out. You might draw up a quick chart too – compare general itemized deductions with AMT itemized deductions, and highlight the differences so you can see it visually. This usually helps me.

Good luck!!

[pia ach]

Yes will do it , got to finish individual taxes tonight and try going over through the tax forms. Have not done that at all. When are you testing?

Finally done!!! Experience-pending. Ethics- Pending.
Reg 78 / 73/82.
Aud 74/89.
BEC 72 /78.
FAR 74/ 73/ 82.

[taxgeek83]

I took my exam last Wednesday. I got pretty arrogant about it and only spent two days going through the test bank. I made it through – as well as through quite a few problems in the book, but I have a feeling my nonchalance is going to come back and bite me.

[Author]

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