Otto and Monica are married taxpayers who file a joint tax return. For the current tax year, they have AGI of $130,800. They have excess depreciation on real estate of $78,480, which must be added back to AGI to arrive at AMTI. The amount of their mortgage interest expense for the year was $26,160, and they made charitable contributions of $13,080. They have no other itemized deductions. If Otto and Monica's taxable income for the current year is $91,560, determine the amount of their AMTI.
Otto and Monica are married taxpayers who file a joint tax return. For the current tax year, they have AGI of $130,800. They have excess depreciation on real estate of $78,480, which must be added back to AGI to arrive at AMTI. The amount of their mortgage interest expense for the year was $26,160, and they made charitable contributions of $13,080. They have no other itemized deductions. If Otto and Monica's taxable income for the current year is $91,560, determine the amount of their AMTI.
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Chapter3: Preparing Your Taxes
Section: Chapter Questions
Problem 5FPE: Calculating taxable income for a married couple filing jointly. Freya and Sebastian Hunter are...
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![### Example Problem on Adjusted Gross Income (AGI) and Alternative Minimum Taxable Income (AMTI) Calculation
**Problem Statement:**
Otto and Monica are married taxpayers who file a joint tax return. For the current tax year, they have an AGI (Adjusted Gross Income) of $130,800. They have excess depreciation on real estate of $78,480, which must be added back to AGI to arrive at AMTI (Alternative Minimum Taxable Income). The amount of their mortgage interest expense for the year was $26,160, and they made charitable contributions of $13,080. They have no other itemized deductions.
**Question:**
If Otto and Monica's taxable income for the current year is $91,560, determine the amount of their AMTI.
**Solution:**
1. **Initial Calculation:**
Start with the AGI:
\[
\text{AGI} = \$130,800
\]
2. **Add Back Depreciation:**
Add the excess depreciation:
\[
\text{Excess Depreciation} = \$78,480
\]
\[
\text{AGI} + \text{Excess Depreciation} = \$130,800 + \$78,480 = \$209,280
\]
3. **Subtract Itemized Deductions:**
Subtract the deductible expenses:
\[
\text{Mortgage Interest} = \$26,160
\]
\[
\text{Charitable Contributions} = \$13,080
\]
\[
\text{Total Deductions} = \$26,160 + \$13,080 = \$39,240
\]
\[
\text{Adjusted AMTI} = \$209,280 - \$39,240 = \$170,040
\]
**Result:**
The calculated AMTI for Otto and Monica is:
\[
\boxed{170,040}
\]
However, the provided solution box shows:
\[
\boxed{117,720}
\]
and it appears marked incorrect. Based on the steps and details provided, our calculated AMTI value is \(\boxed{170,040}\). Therefore, the provided answer seems to have an error.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4a838c8e-9209-4b5d-b96a-c966f484a578%2F0be3a3cc-80be-4011-a29f-5152d185f5b4%2Fqlvh1b9_processed.png&w=3840&q=75)
Transcribed Image Text:### Example Problem on Adjusted Gross Income (AGI) and Alternative Minimum Taxable Income (AMTI) Calculation
**Problem Statement:**
Otto and Monica are married taxpayers who file a joint tax return. For the current tax year, they have an AGI (Adjusted Gross Income) of $130,800. They have excess depreciation on real estate of $78,480, which must be added back to AGI to arrive at AMTI (Alternative Minimum Taxable Income). The amount of their mortgage interest expense for the year was $26,160, and they made charitable contributions of $13,080. They have no other itemized deductions.
**Question:**
If Otto and Monica's taxable income for the current year is $91,560, determine the amount of their AMTI.
**Solution:**
1. **Initial Calculation:**
Start with the AGI:
\[
\text{AGI} = \$130,800
\]
2. **Add Back Depreciation:**
Add the excess depreciation:
\[
\text{Excess Depreciation} = \$78,480
\]
\[
\text{AGI} + \text{Excess Depreciation} = \$130,800 + \$78,480 = \$209,280
\]
3. **Subtract Itemized Deductions:**
Subtract the deductible expenses:
\[
\text{Mortgage Interest} = \$26,160
\]
\[
\text{Charitable Contributions} = \$13,080
\]
\[
\text{Total Deductions} = \$26,160 + \$13,080 = \$39,240
\]
\[
\text{Adjusted AMTI} = \$209,280 - \$39,240 = \$170,040
\]
**Result:**
The calculated AMTI for Otto and Monica is:
\[
\boxed{170,040}
\]
However, the provided solution box shows:
\[
\boxed{117,720}
\]
and it appears marked incorrect. Based on the steps and details provided, our calculated AMTI value is \(\boxed{170,040}\). Therefore, the provided answer seems to have an error.
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