Arthur Wesson, an unmarried individual who is age 58, reports taxable income of $510,000 in 2023. He reports positive AMT adjustments of $80,000 and preferences of $35,000. Arthur itemizes his deductions, and his regular tax liability in 2023 is $150,395. Click here to access the exemption table. a. Arthur's initial AMT exemption amount for 2023 is $ phased out ✓ at a rate of 25 cents on the dollar when AMTI exceeds $ 75,900 X, since his filing status is single. However, the exemption is 518,400 X. Therefore, Arthur's total AMT 48,200 X. exemption will be $ A graduated, two-tier AMT rate schedule applies to individual taxpayers. A 26% base, and a 28% ✓ rate applies to the AMT base in excess of $220,700. Compute Arthur's AMT for 2023. Arthur's taxable income (before personal exemption) 510,000 Plus: Positive AMT adjustments Plus: Tax preferences Equals: AMTI Less: Exemption Equals: AMT base Tentative AMT Regular income tax liability AMT 69 80,000 35,000 625,000 $150,395 rate applies to the first $220,700 of the AMT
Arthur Wesson, an unmarried individual who is age 58, reports taxable income of $510,000 in 2023. He reports positive AMT adjustments of $80,000 and preferences of $35,000. Arthur itemizes his deductions, and his regular tax liability in 2023 is $150,395. Click here to access the exemption table. a. Arthur's initial AMT exemption amount for 2023 is $ phased out ✓ at a rate of 25 cents on the dollar when AMTI exceeds $ 75,900 X, since his filing status is single. However, the exemption is 518,400 X. Therefore, Arthur's total AMT 48,200 X. exemption will be $ A graduated, two-tier AMT rate schedule applies to individual taxpayers. A 26% base, and a 28% ✓ rate applies to the AMT base in excess of $220,700. Compute Arthur's AMT for 2023. Arthur's taxable income (before personal exemption) 510,000 Plus: Positive AMT adjustments Plus: Tax preferences Equals: AMTI Less: Exemption Equals: AMT base Tentative AMT Regular income tax liability AMT 69 80,000 35,000 625,000 $150,395 rate applies to the first $220,700 of the AMT
Chapter12: Alternative Minimum Tax
Section: Chapter Questions
Problem 27P
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Transcribed Image Text:Arthur Wesson, an unmarried individual who is age 58, reports taxable income of $510,000 in 2023. He reports positive AMT adjustments
of $80,000 and preferences of $35,000. Arthur itemizes his deductions, and his regular tax liability in 2023 is $150,395.
Click here to access the exemption table.
a. Arthur's initial AMT exemption amount for 2023 is $
phased out
✓ at a rate of 25 cents on the dollar when AMTI exceeds $
75,900 X, since his filing status is single. However, the exemption is
518,400 X. Therefore, Arthur's total AMT
48,200 X.
exemption will be $
A graduated, two-tier AMT rate schedule applies to individual taxpayers. A 26%
base, and a 28%
✓ rate applies to the AMT base in excess of $220,700.
Compute Arthur's AMT for 2023.
Arthur's taxable income (before personal exemption)
510,000
Plus:
Positive AMT adjustments
Plus:
Tax preferences
Equals: AMTI
Less:
Exemption
Equals: AMT base
Tentative AMT
Regular income tax liability
AMT
69
80,000
35,000
625,000
$150,395
rate applies to the first $220,700 of the AMT
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