Re: Calculations for Alternative Minimum Tax

<KEBSCHULLW@xxxxxxx> wrote in message
news:1143429486.036571.4970@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Richard Macdonald wrote:
<KEBSCHULLW@xxxxxxx> wrote in message

If Congress intended to exclude from AMTI refunds of taxes that were
deductible when the regular tax was paid then section 56(b)(1)(D) would
has so indicated. Section 56(b)(1)(D) would have read as follows:

(D) TREATMENT OF CERTAIN RECOVERIES
No recovery of any tax to which paragraphs
(1), (2), or (3) of section 164(a) applied shall
be included in gross income for purposes
of determining alternative minimum taxable income.

Actually, your wording here would allow the exclusion of
recoveries of taxes that were not disallowed by 56(b)(1)(A)(ii),
now think about that and tell me why.

But instead, section 56(b)(1)(D) of the IRC states,

No recovery of any tax to which subparagraph
(A)(ii) applied shall be included in gross income
for

They DID (A)(ii) IS taxes under 164(a)(1), (2), & (3), and they are both
in
56(b)(1)

Try reading section 56(b)(1)(a)(ii) again.

(A) IN GENERAL
No deduction shall be allowed--
(i) for any miscellaneous itemized deduction (as
defined in section 67(b)), or
(ii) for any taxes described in paragraph (1), (2),
or (3) of section 164(a) or clause (ii) of section
164(b)(5)(A).
Clause (ii) shall not apply to any amount allowable in
computing adjusted gross income.

Since AMTI IS calculated EVERY year, it is ALWAYS applies.

purposes of determining alternative minimum taxable income.

IRS instructions ignores the law and excludes from AMTI refunds of
taxes REGARDLESS of whether they were deductible in determining
regular taxable income under paragraph (1), (2), or (3) of 164(a) or
not deductible under section 56(b)(1)(a)(ii) when the AMT was paid.

That is because the is no requirement in Section 56 for AMT having to
have been paid since AMTI is calculated every year, even when there
is no AMT paid. Ergo, the IRS instructions ARE correct, you just can't
understand that the tax benefit rules from 111(a) do not apply to AMTI.

DUH?

Right, there is no tax benefit rule for AMTI

If Congress intended to exclude from AMTI refunds of taxes that were
deductible when the regular tax was paid then section 56(b)(1)(D) would

has so indicated. Section 56(b)(1)(D) would have read as follows:

(D) TREATMENT OF CERTAIN RECOVERIES
No recovery of any tax to which paragraphs
(1), (2), or (3) of section 164(a) applied shall
be included in gross income for purposes
of determining alternative minimum taxable income.

Actually, your wording here would allow the exclusion of
recoveries of taxes that were not disallowed by 56(b)(1)(A)(ii),
now think about that and tell me why.

But instead, section 56(b)(1)(D) of the IRC states,

No recovery of any tax to which subparagraph (A)(ii)
applied shall be included in gross income for purposes
of determining alternative minimum taxable income.

Go read 56(b)(1)(A) again and enlighten us as to why your
wording would allow the exclusion of recoveries that would
not be excluded under the current wording of 56(b)(1)(D).

IRS instructions ignores the law and excludes from AMTI
refunds of taxes REGARDLESS of whether they were
deductible in determining regular taxable income under
paragraph (1), (2), or (3) of 164(a) or not deductible under
section 56(b)(1)(a)(ii) when the AMT was paid.

That is because taxes that are deducted from AGI under 164
are disallowed for AMTI by 56(b) even if no AMT is paid
as AMTI and TMT also provide a floor below which several
credits may not lower your regular taxes. AMTI is calculated
even in year that AMT is NOT paid.


.

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