Farr, who is single, has no dependents and does not itemize her deductions. She
ID: 2577484 • Letter: F
Question
Farr, who is single, has no dependents and does not itemize her deductions. She reports the following items on her 2017 tax return:
**Exemption for single in 2017=$54,300; Phaseout begins at $120,700, ends at $337,900
Bargain element from the exercise of an ISO (no restrictions apply to the stock) $45,000 MACRS depreciation on shopping mall building acquired in 2013 49,000 Percentage depletion in excess of property's adjusted basis 50,000 Taxable income for regular income tax purposes 121,000 Regular tax liability 26,862 b. Calculate Farr's AMT for 2017 by completing the requirements below. Click here to access exemption tables. Will Farr's AMT exemption be limited? The tentative exemption of is at a rate of 25 cents on the dollar when AMTI exceeds Compute Farr's AMTI, AMT base taxable income (before standard deduction and personal exemption) and AMT If required, round your intermediate computations and final answer to nearest dollar. Computation of AMTI and AMT Base Taxable income (before standard deduction and personal exemption) $131,400 Net AMT adjustments and tax preferences Equals: AMTI exemption amount AMT base AMT computation Tentative minimum tax Less: tax on regular taxable income AMTExplanation / Answer
b) The tentative exemption of $54,300 is reduced at a rate of 25 cents on the dollar when AMTI exceeds $120,700.
Computation of AMT Income and AMT base for 2017 (Amount in $)
Taxable Income (before standard deduction and personal exemption) (121,000+6,350+4,050) 131,400 AMT adjustments and tax preferences: Add: MACRS depreciation 49,000 Add: Bargain element from the exercise of an ISO 45,000 Less: Percentage Depletion (50,000) Equals: AMT Income 175,400 Less: Phasedout Exemption amount [$54,300 - 25%*($175,400 - $120,700)] (40,625) AMT Base 134,775 AMT Computation Tentative minimum tax (26% of 134,775) 35,042 Less: Tax on regular taxable income (26,862) AMT 8,180Related Questions
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