Alternative Minimum Tax Income

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Alternative Minimum Tax Income

In the United States, income subject to the alternative minimum tax. It is calculated by adding certain deductions back into a person's adjusted gross income and then subtracting the AMT exemption. The taxpayer pays a percentage of the alternative minimum tax income rather than his/her AGI. See also: Tentative minimum tax, Bracket creep.
References in periodicals archive ?
While corporate AMT has been eliminated and the individual AMT exemption has been, at least temporarily, significantly increased, IRC section 55(d)(1)(D) has remained unchanged, leaving the statutory AMT exemption amount for estates and trusts at $22,500 and the statutory exemption phaseout threshold amount at $75,000 of AMT income.
A percentage of the gain excluded under regular tax is an AMT preference item, that is, it is included in AMT income.
Generally, the spread that would be reported as compensation if the ISO were a NQSO is an addition to the employee's AMT income in the year of exercise.
Since the taxes on Schedule A of an individual income tax return aren't a deduction in computing AMT income on IRS Form 6151, the rule-of-thumb has been, for clients who are in the AMT, that it doesn't pay to pre-pay those taxes.
However, state and local taxes are not deductible when calculating AMT income, so making that payment in 2007 won't help.
This latter technique can be particularly effective for taxpayers in the "AMT zone" in which each dollar of reduced AMT income increases the AMT exemption amount by $1.
Banks is married and has no other income or deductions, his AMT income is the full $464,000 settlement amount since any exemptions are phased out.
The limit on NOL deductions from Alternative Minimum Tax (AMT) income is increased from 90 percent of AMT income to 100 percent for NOLs generated or taken as carryforwards in tax years ending in 2001 and 2002.
When an ISO is exercised, the difference between the stock's fair market value and the ISO's exercise price is AMT income, even if the stock is not sold at that time.
68 The optionee's tentative AMT liability is: Salaries $ 300,000 Compensation due to disposed ISO shares 8309 shares x $120 spread $ 997,080 ISO adjustment due to retained shares 3691 shares x $120 spread $ 442,920 AMT income $ 1,740,000 Tentative AMT liability @ 28% approximate $ 487,200
A new 26% rates applies to up to $175,000 of AMT income (above an exemption amount); a 28% rate applies to any additional AMT income.
For taxable years beginning after 1989, corporate AMT income is increased by an amount equal to 75 percent of the amount by which the adjusted current earnings (ACE) of the corporation exceed AMT income.