Business, 13.03.2020 19:55 webbjalia04

Pat is 40, is single, and has no dependents. She received a salary of $390,000 in 2018. She earned interest income of $11,000, dividend income of $15,000, gambling winnings of $14,000, and interest income from private activity bonds (issued in 2015) of $40,000. The dividends are not qualified dividends.

The following additional information is relevant.

Medical expenses (before 7.5%-of-AGI floor) $12,000

State income taxes 8,100

Real estate taxes 4,000

Mortgage interest on residence 13,100

Investment interest expense 3,800

Gambling losses 5,100

a. Compute Pat's taxable income and AMTI. Taxable Income Computation Adjusted gross income $ 430,000 Itemized deductions Taxable income $ AMTI Computation Taxable income $ Add: itemized deductions adjustments Add: income tax preference items AMTI $ Feedback The purpose of the AMT formula is to reconcile taxable income to AMTI. The reconciliation of taxable income to AMTI is accomplished by entering reconciling items to account for differences between regular income tax provisions and AMT provisions. These reconciling items are referred to as AMT adjustments or tax preferences.

b. Compute Pat's tentative minimum tax. If required, round amounts to the nearest dollar. Computation of AMT Base and Tax AMTI $ AMT exemption AMT base $ Tentative AMT $

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Pat is 40, is single, and has no dependents. She received a salary of $390,000 in 2018. She earned i...

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