Wolfgang, who is age 33, records AGI of $125,000. He incurs the following itemiz

Question

Wolfgang, who is age 33, records AGI of $125,000. He incurs the following itemized deductions for 2017:

a. Calculate Wolfgang's itemized deductions for AMT purposes. If an amount is zero, enter "0".

b. What is the total amount of his AMT adjustments from these items?

There is a _________ (Choose: Positive or Negative) adjustment of $__________.

Medical expenses [$15,000-(10% x $125,000)] State income taxes Charitable contributions Home mortgage interest on his personal residence Casualty loss (after $100 and 10% reductions) Miscellaneous itemized deductions [$3,500-(2% x $125,000)] $2,500 4,200 5,000 6,000 1,800 1,000 $20,500

Explanation / Answer

a. Wolfgang’s itemized deductions for AMT purposes are calculated as follows: Medical expenses [$15,000 – (10% X $125,000)] $     2,500 Charitable contributions         5,000 Qualified housing interest         6,000 Casualty loss         1,800 Total $   15,300 Neither the state income taxes of $4,200 nor the miscellaneous itemized deductions of $3,500 are deductible for AMT purposes. b. The AMT adjustment is calculated as follows: Itemized deductions for regular income tax $   20,500 Less: Itemized deductions for AMT purposes      (15,300) Positive AMT adjustment $ 5,200

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