What is an AMT exemption and do calculate the exemption amount?
Once the taxpayer has calculated their alternative minimum taxable income (AMTI), the taxpayer can assess whether they have any AMT exemptions. The AMT exemption reduces the taxpayers AMTI down to the alternative minimum tax base. There are also certain phase-out thresholds applicable to AMTI.
For 2020, the AMT phase-out thresholds and exceptions are as follows:
The visual below shows an example on how to calculate the AMT exemption for Jaxson!
Back To All Questions
You might also be interested in... How to calculate AMTI from regular taxable income?
To calculate alternative minimum taxable income (“AMTI”), there are certain adjustments and preferences need to be applied to regular taxable income. The most common types of adjustments and preferences to ATMI are laid out in the visual below:
What are common adjustments to ATMI?
According to IRS literature, adjustments are defined as specific items that may either increase or decrease taxable income. Adjustments are referred to as timing differences that can either increase or decrease alternative minimum taxable income (AMTI). Examples of adjustments include:
What are preferences that are added to ATMI?
According to the IRS, “preference” items are always added back when calculating AMTI. Preference items for AMT purposes consist of:
How to calculate AMTI from regular taxable income?
To calculate alternative minimum taxable income (“AMTI”), there are certain adjustments and preferences need to be applied to regular taxable income. The most common types of adjustments and preferences to ATMI are laid out in the visual below:
What are common adjustments to ATMI?
According to IRS literature, adjustments are defined as specific items that may either increase or decrease taxable income. Adjustments are referred to as timing differences that can either increase or decrease alternative minimum taxable income (AMTI). Examples of adjustments include:
What are preferences that are added to ATMI?
According to the IRS, “preference” items are always added back when calculating AMTI. Preference items for AMT purposes consist of:
