Re: More KEBSCHULLW standoff saga

On Sep 23, 4:52?pm, "Paul Thomas" <paulthomas...@xxxxxxxxxxxxx> wrote:
<KEBSCHU...@xxxxxxx> wrote

just when is the either the income used for the overpayment that produced
a tax benefit

There is income that is used for an overpayment, that also produces a tax
benefit?


I've got to get me tens of thousands of this income.

Do tell me more.

Glad to, lil' paulie.

It is the overpayment that produces the tax benefit. Income is used
for the overpayment that is allowed as a deduction and this reduces
taxable income for regular tax purposes but does not reduce AMTI.
Nevertheless, a state income tax overpayment can reduce the AMT
because of the two-tier long-term capital gains rate structure.
Therefore under the tax benefit rule, income ATTRIBUTABLE to the
recovery of the income that was used for the overpayment that produced
the tax benefit when only the regular tax is paid is included in gross
income to the EXTENT that the overpayment produced a tax benefit. And
just so you understand, contrary to IRS's FRAUDULENT instructions, the
taxable income attributable to a recovery cannot exceed the amount of
the recocery. When the AMT wasactually paid ( the AMT amount entered
on Form 1040 is > 0 ) and there was a limited long-term capital gains
rate based benefit as a result of a state income tax overpayment, the
refund is included in gross income for purposes of determining the
capital gains portion of regular tax and the AMT. It is not included
on Line 10 of Form 1040 and therefore is not taxed directly, again
contrary to IRS instructions.


If a tax overpayment is allowed as a deduction in a year that the
regular tax is paid and the refund of the overpayment in a subsequent
year is excluded from AMTI in a year the AMT is paid, just when is
the either the income used for the overpayment that produced a tax
benefit or the refund of the income used for the overpayment taxed
directly?

Do you think that you can answer the question now?

Cheers,

WDK



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Relevant Pages

  • Re: 2005 AMT Change Question
    ... >>> tax treatment of state income tax refunds is limited. ... >>> income taxes are allowed as deductions in determining regular taxable ... >>> tax overpayment when itemized deductions exceed the standard deduction. ...
    (misc.taxes)
  • Re: 2005 AMT Change Question
    ... >>> the AMT was paid in the overpayment year and the regular tax was paid ... >>> overpayment nor was there an underpayment.. ... > tax treatment of state income tax refunds is limited. ...
    (misc.taxes)
  • Re: 2005 AMT Change Question
    ... >> tax treatment of state income tax refunds is limited. ... >> tax overpayment when itemized deductions exceed the standard deduction. ... >> overpayment when the AMT is paid. ...
    (misc.taxes)
  • Re: This is a "tax professional" giving advice?
    ... >>> be excluded from alternative minimum taxable income (BY THE NEGATIVE ... >> being deductable for AMT in the prior year, ... So the amount of state tax refund that was added to ... If no AMT was paid in the overpayment year then the regular tax ...
    (misc.taxes)
  • Re: Calculations for Alternative Minimum Tax
    ... there is a tax benefit requirement, so show it in the law. ... do you assert that they ALSO apply to AMTI. ... Gross income does not include income attributable to the ...
    (misc.taxes)