Question

In each of the following cases, compute AMT (if any). For all cases, assume that taxable income does not include any dividend incom or capital gain. a. Mr. and Mrs. Baker's taxable income on their joint return was $221,000, and their AMTI before exemption was $221,900. b. Mr. Costa's taxable income on his single return was $194,310, and his AMTI before exemption was $216,900. c. Ms. White's taxable income on her single return was $680,075, and her AMTI before exemption was $809,700. Assume the taxable year is 2019. Use Individual Tax Rate Schedules. Complete this question by entering your answers in the tabs below. Required A Required B Required C Mr. and Mrs. Baker's taxable income on their joint return was $221,000, and their AMTI before exemption was $221,900. (Round your intermediate calculations and final answer to the nearest whole dollar amount.) АМТ

Answer 1

a) computation of AMT for MR and MRS baker for the year 2019

particulars	Amount ($)	Line no
AMTI before exemption	221900	1
Less 2019 AMTI deduction for married filling Jointly	-111700	2	STANDARD EXEMPTION LIMIT OF aMT SET BY GOVERMENT FOR YEAR 2019 FOR MARRIED FILLING JOINTLY
Alternate Minimum Taxable income (AMTI base)	110200	3
rate of tax @28%	30856	multilply Line 3 * 28%	as AMTI IS MORE THAN $ 97400 THE TAXABLE RATE =28%
Less standard amt	-1948
Alternate minimum Tax	28908

computation of Federal tax as per tax slab

particulars	Amount ($)
TAXABLE INCOME	221000
FEDERAL tAX LIABILITY AS PER 2019 SLAB BASE	1940	UPTO 19400 @10%
NEXT SLAB	7146	NEXT( 78950-19400)*12%
NEXT SLAB	19679	NEXT (168400-78950)*22%
NEXT SLAB	12624	(221000-168400)@24%
TOTAL fEDERAL TAX LAIBILITY	41389

As  AMT for mr & mrs BAker  IS $28908 , where is federal tax liability is $41389

MR & mrs Baker has to pay as per FEDERAL tax liabiltity because its more than AMT

B)

particulars	Amount ($)	Line no
AMTI before exemption	216900	1
Less 2019 AMTI deduction for married filling Jointly	-71700	2	STANDARD EXEMPTION LIMIT OF aMT SET BY GOVERMENT FOR YEAR 2019 FOR individual FILLING
Alternate Minimum Taxable income (AMTI base)	145200	3
rate of tax @26 %	37752	multilply Line 3 * 26%	as AMTI IS less THAN or $ 194800THE TAXABLE RATE =26%
Less standard amt	-3896
Alternate minimum Tax	33856

computation of Federal tax as per tax slab

particulars	Amount ($)
TAXABLE INCOME	194310
FEDERAL tAX LIABILITY AS PER 2019 SLAB BASE	970	UPTO 9700 @10%
NEXT SLAB	3573	NEXT( 39475-9700)*12%
NEXT SLAB	9839.5	NEXT (84200-39475)*22%
NEXT SLAB	18366	(160725-84200)@24%
next salab	10747.2	(194310-160725)*32%
TOTAL fEDERAL TAX LAIBILITY	43495.7

AMT for MR coasta =$33856 where as FEderal Tax liability = $43495.7

C)

particulars	Amount ($)	Line no
AMTI before exemption	809700	1
Less 2019 AMTI deduction for married filling Jointly	-0	2	STANDARD EXEMPTION LIMIT OF aMT SET BY GOVERMENT FOR YEAR 2019 FOR individual FILLING will face out .25 cent per dollor if threshold income of $510300 is passed by individual As limit of exemption =71710 where limit phase out = 74850 (809700-510300)*.25 so limit is totally phase out
Alternate Minimum Taxable income (AMTI base)	809700	3
rate of tax @28 %	226716	multilply Line 3 * 28%	as AMTI IS more THAN or $ 194800THE TAXABLE RATE =28%
Less standard amt	-3896
Alternate minimum Tax	222820

computation of Federal tax as per tax slab

particulars	Amount ($)
TAXABLE INCOME	680075
FEDERAL tAX LIABILITY AS PER 2019 SLAB BASE	970	UPTO 9700 @10%
NEXT SLAB	3573	NEXT( 39475-9700)*12%
NEXT SLAB	9839.5	NEXT (84200-39475)*22%
NEXT SLAB	18366	(160725-84200)@24%
next salab	31160	(204100-160725)*32%
next slab	107170	(510300-204100)*35%
next slab	62816.75	(680075-510300)*37%
TOTAL fEDERAL TAX LAIBILITY	233895.25

AMT =$222820

fEDERAL TAX LAIBILITY = $ 233895.25