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 ?
Value Analysis Committees require proof that a product is truly a physician preference item using clinical studies, with evidence of unique features that truly impact outcomes or reduce hospital costs.
Our physician preference item program addresses significant health system pain points and now spans orthopedics, interventional cardiology and wound management.
A portion of the interest on specified private activity bonds issued after December 31, 2010, may be a tax preference item subject to the alternative minimum tax.
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.
Jack must add back $10,500 ($150,000 x 7%) as a preference item when determining his AMT.
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.
Specifically, the difference between the FMT and option price of an ISO at exercise is an AMT preference item.
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.
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.