Jackson sells qualifying small business stock for $125,000 (adjusted basis of $105,000) in 2017 (the stock was acquired in 2011). In calculating gross income for regular income tax purposes, he excludes all of his realized gain of $20,000. The $20,000 exclusion is a preference in calculating Jackson's AMTI.

Question

Quizplus · Accepted Answer

Excluding realized gain from qualifying small business stock is a preference item in calculating Alternative Minimum Taxable Income (AMTI), not a preference in calculating regular income tax.

Jackson Sells Qualifying Small Business Stock for $125,000 (Adjusted Basis