Ashby,who is single and age 30,provides you with the following information from his financial records for 2016.
Regular income tax liability
$ 47,228
AMTI
225,000
Taxable income
195,000

Calculate his AMT exemption for 2016.
A)$0
B)$17,000
C)$25,575
D)$53,900

Question

Ashby,who is single and age 30,provides you with the following information from his financial records for 2016.
Regular income tax liability
$ 47,228
AMTI
225,000
Taxable income
195,000
​
Calculate his AMT exemption for 2016.
A)$0
B)$17,000
C)$25,575
D)$53,900

Quizplus · Accepted Answer

The AMT exemption for 2016 is $53,900 for single individuals with AMTI below the exemption amount. Ashby's AMTI of $225,000 exceeds the exemption amount by $171,100 ($225,000 - $53,900) which means that his AMT exemption will be reduced by 25% of the excess, or $42,775 ($171,100 x 0.25). Therefore, his AMT exemption for 2016 will be $53,900 - $42,775 = $11,125. However, since his regular income tax liability ($47,228) is greater than his AMT liability (which would be $9,335 based on his AMTI and AMT exemption), he does not actually have to pay the AMT.

Ashby,who Is Single and Age 30,provides You with the Following