Re: Calculations for Alternative Minimum Tax

<KEBSCHULLW@xxxxxxx> wrote in message
news:1143648744.056236.257520@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Richard Macdonald wrote:
<KEBSCHULLW@xxxxxxx> wrote in message
news:1143633168.776504.171800@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Richard Macdonald wrote:
<KEBSCHULLW@xxxxxxx> wrote in message
news:1143394154.008452.147440@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Richard Macdonald wrote:

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.

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

Do you now see where your rewording of 56(b)(1)(D) would allow
refunds to be subtracted for taxes whose deductions WERE allowed
for AMTI which were reported on Sch C, E, F and other forms that
deduct taxes for AGI and not Sch A which deducts taxes from AGI.

Because 56(b)(1)(A)(ii) only applies to taxes deducted on Schedule
A and not any of the other forms where state and foreign taxes can
be deducted.

I understand what you are saying.

I was not suggesting that section 56(b)(1)(D) be modified. I was only
indicating how section 56(b)(1)(D) would have to read for IRS to
LEGITIMATELY exclude from AMTI the recovery of deductions that provided
a tax benefit when claimed on Schedule A in years when the regular tax
was paid. Since recoveries of deductions that provided a tax benefit
when claimed on Schedule A are CURRENTLY illegitimately excluded from
AMTI by bogus IRS instructions, why not expand the exclusion to include
that deductions claimed on Schedule C, E, F, etc.? If the tax
treatment of deduction recoveries are going to be screwed-up why
shouldn't they be screwed-up 100%?

Your rewrite would go way beyond what the IRS instructions cover.
Since tax refunds reported on Form 1040 Line 10 are from thise taxes
deducted on Schedule A, as taxes deducted on other forms such as
Sch C, E, & F should be recaptured on those forms as the recovery
may be subject to SE Tax. Yours would allow the subtraction for AMTI
of recoveries of taxes reported on Schedules C, E, & F, taxes that
the deductions of which is not disallowed for AMTI.

So what tax refunds do the current instructions allow to be subtracted
for
AMTI that are not supposed to be subtracted per 56(b)(1)(D). Note,
there is NO tax benefit rule for AMTI. Unless you assert that AMTI is
only calculated in years that AMT is paid, the IRS instructions are
accurate.

Show me the Tax Benefit Rule in Section 56; as Section 56 applies
in lieu of Section 111 for AMT/AMTI purposes. Section 111(a)'s
tax benefit rule does not apply to AMT/AMTI per 56(b):
"Code Sec. 56. Adjustments in computing alternative minimum taxable
income
(b) ADJUSTMENTS APPLICABLE TO INDIVIDUALS
In determining the amount of the alternative minimum taxable income of
any
taxpayer (other than a corporation), the following treatment shall apply
(in lieu of the treatment applicable for purposes of computing the
regular
tax):" You do know that "in lieu of" means "instead of".

I KNOW what "in lieu of" and "applied" mean in the context context of
26USC56(b)(1)(a)(ii) and I KNOW what "attributable" and "extent" mean
in the contest of 26USC 111(a). Those words mean that for applicable
deductions and recoveries it is generally a ZERO SUM GAME in terms of
taxable income. Because of twisted IRS interpretations of the thoses
sections, it can be "DOUBLE OR NOTHING" for the taxable income
attributable to a tax refund.

There is your confusion, there is not One zero sum game, there are TWO
zero sum games: One zero sum game for regular tax under 164 and 111(a),
and a second Zero Sum Game for AMT/AMTI under 56(b).

These are seperate zero sum games with different determination basis'.

Recoveries of itemized deductions for Regular Tax are under the rules of
Section 111.

Recoveries of Taxes disallowed for AMTI are under Section 56(b)(1)(A)(ii),
are not income for AMTI under 56(b)(1)(D); and any actual payment of AMT
has no effect beiring on the calculation of AMTI as any actual payment of
regular tax effects the calculation of Taxable Income.


.

Relevant Pages

  • Re: Calculations for Alternative Minimum Tax
    ... If Congress intended to exclude from AMTI refunds of taxes that were ... No recovery of any tax to which paragraphs ... LEGITIMATELY exclude from AMTI the recovery of deductions that provided ...
    (misc.taxes)
  • Re: Calculations for Alternative Minimum Tax
    ... If Congress intended to exclude from AMTI refunds of taxes that were ... No recovery of any tax to which paragraphs ... LEGITIMATELY exclude from AMTI the recovery of deductions that provided ...
    (misc.taxes)
  • Re: Marriage, Household Chores, and Divorce
    ... Property taxes here aren't that bad. ... The Oregon property tax is about ... and charitable deductions. ... That helps to explain the value of your house based upon the income tax ...
    (soc.men)
  • Re: Richard A. Macdonald, CPA/EA Continues to Support IRSs Multi-Billion Flimflam Related to the
    ... treatment of state income tax refunds. ... State and local, and foreign, real property taxes. ... State and local, and foreign, income, war profits, and excess ... for AMTI any refund of State Taxes that is included in Gross Income ...
    (misc.taxes)
  • Re: Calculations for Alternative Minimum Tax
    ... If Congress intended to exclude from AMTI refunds of taxes that were ... No recovery of any tax to which paragraphs ... LEGITIMATELY exclude from AMTI the recovery of deductions that provided ...
    (misc.taxes)