Arlene, who is single and itemizes deductions, reports taxable income for 2022 of $612,000. Calculate her alternative minimum tax, if any, given the following additional information. AMT adjustments Positive $22,000 Negative (25,000) Tax preferences 146,000

Arlene, who is single and itemizes deductions, reports taxable income for 2022 of $612,000. Calculate her alternative minimum tax, if any, given the following additional information. AMT adjustments Positive $22,000 Negative (25,000) Tax preferences 146,000

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter12: Alternative Minimum Tax

Section: Chapter Questions

Problem 50P: Renee and Sanjeev Patel, who are married, reported taxable income of 1,008,000 for 2019. They...

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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

Arlene, who is single and itemizes deductions, reports taxable income for 2022 of $612,000. Calculate her alternative minimum tax, if any, given the following additional information.
AMT adjustments
Positive $22,000
Negative (25,000)
Tax preferences 146,000

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Arthur Wesson, an unmarried individual who is age 68, reports taxable income of 510,000 in 2019. He records positive AMT adjustments of 80,000 and preferences of 35,000. Arthur itemizes his deductions, and his regular tax liability in 2019 is 153,694. a. What is Arthurs AMT? b. What is the total amount of Arthurs tax liability? c. Draft a letter to Arthur explaining why he must pay more than the regular income tax liability. Arthurs address is 100 Colonels Way, Conway, SC 29526.
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