I have another one.. why would they allow medical. I was sure the excess you claim for Medical in your Deductions needs to be added back for AMT,
So I would have picked Charitable contributions the qualified housing Interest as the only two that is allowable for AMT. 🙁 But my answer wasn't even an option.
Robert had current-year adjusted gross income of $100,000 and potential itemized deductions as follows:
$12,000 Medical expenses (before percentage limitations)
4,000 State income taxes
3,500 Real estate taxes
10,000 Qualified housing and residence mortgage interest
4,500 Home equity mortgage interest (used to consolidate personal debts)
5,000Charitable contributions (cash)
What are Robert’s itemized deductions for alternative minimum tax?
A. $17,000
B. $21,500
C. $19,500
D. $25,500
Answer (A) is correct.
Individuals are entitled to claim itemized deductions in calculating AMT with certain adjustments. The following itemized deductions are not allowed:
Miscellaneous itemized deductions,
State, local, and foreign income taxes, and
Real and personal property taxes.
Deductions claimed for medical expenses are allowed but the expenses must exceed 10% of AGI for AMT instead of the usual 7.5%. Qualified housing interest is deductible which is similar to the qualified residence interest deduction that is allowed against regular tax
The allowable itemized deductions for AMT are $2,000 of medical expenses, $10,000 of qualified housing interest, and $5,000 of charitable contributions.
FAR 05/27/14; 786/110 - Done !
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