tax preference item

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Tax preference item

Items that must be included when calculating the alternative minimum tax.

Tax Preference Item

Income or other event that is excluded when calculating one's ordinary tax liability but is included when calculating one's liability for the alternative minimum tax. That is, a tax preference item is an item that would be tax deductible under normal circumstances but is not for purposes of the alternative minimum tax. Examples include depreciation and some interest on municipal bonds.

tax preference item

An item that can be legally omitted in order to reduce taxable income when calculating an individual's tax liability by ordinary means. However, the item must be included when calculating the individual's alternative minimum tax. For example, interest paid by certain municipal bonds that is ordinarily omitted in calculating taxable income must be included when calculating the alternative minimum tax.
References in periodicals archive ?
The court rejected that argument, stating Groetzinger considered only whether a gambling activity was a trade or business for the purpose of treating a gambling loss as a tax preference item for the alternative minimum tax.
The low preference item included in the test of reinforcement was an item that was the lowest in at least one condition and was chosen in the low end of the hierarchy across all assessment condition.
As shown in Figure 2, the high preference item was associated with a higher percentage of task engagement (M = 55.
Charitable contributions of appreciated property no longer will result in an alternative minimum tax preference item for the difference between market value and the taxpayer's basis.
If passed, it would also remove depreciation as an Alternative Minimum Tax (AMT) preference item so that a company would not suffer a tax penalty if it claimed accelerated depreciation.
If the stock is not sold within the first year, then it becomes a preference item on the alternative minimum tax.
5 percent when the "adjusted current earnings and profits" preference item replaces the book income preference after 1989.
For stock sales before May 6, 2003, 42% of the gain realized on QSBS was a tax preference item in determining AMTI.
A percentage of the gain excluded under regular tax is an AMT preference item, that is, it is included in AMT income.
The ABC Inventory Analysis feature has been expanded to support the search of preference item usage based on average cost or billing data over a range of dates.
Interestingly enough, there is no FTB rule on what to report as a preference item in these circumstances when an ISO is exercised and held.
Previously, the donation of appreciated property created a preference item to the extent that fair market value exceeded the taxpayer's adjusted basis in the property.