individual_AMT_examples_solution

individual_AMT_examples_solution - Individual AMT examples...

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Individual AMT examples – Solution Part 1: Married with children. Troy and Katie are married, file a joint return, and have four dependent children. All the children are under age 17. They use the following information to compute taxable income in 2009: Gross income Salary 80,000 Interest income 10,000 Business gross income 130,000 Itemized deductions State and local taxes (9,400) Mortgage interest (12,000) Charitable contributions (3,000) Business deductions 1 (100,000) Note 1 : Includes MACRS deduction of $45,000; only $25,000 would be claimed under ADS using the 150% declining balance method (200% DDB vs. 150% DDB). Required : Compute Troy and Katie’s Federal income tax liability including their AMT (if any). Solution : Regular taxable income Gross income 2009 2008 Salary 80,000 80,000 Interest income 10,000 10,000 Business income ($130,000 – $100,000) 30,000 30,000 AGI 120,000 120,000 Less: Itemized deductions State and local taxes 9,400 Mortgage interest 12,000 Charitable contributions
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individual_AMT_examples_solution - Individual AMT examples...

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