Re: A metaphysical discussion about the AMT and Capital Gains--how the AMT nullifies long term capital gains

On Jan 15, 7:12 am, "Paul Thomas, CPA" <paulthomascp...@xxxxxxxxxxxxx>
wrote:

Thanks Paul Thomas--very interesting about the phase-outs. I wish I
had talked to you earlier, since an actual situation I faced was a $2M
capital gain that was tax-deferred since the AMT was believed* to be a
tax at ordinary income rates of 28% (instead more real estate was
bought in a Starker exchange, which turned out to be a bad short-term
decision). In fact, not to obligate you to answer, but I'm curious
why (since I still have to do the tax calculations) your calculation
for a $1M capital gains is a little less than 15%. Or, to make my
example, why wouldn't the tax bill for $2M capital gains (all long
term real estate) be $560000, not about $300k?

RL

* if you work in the field as a tax preparer, just to show you the
actual level of sophistication in the field--or the actual extent of
dishonesty--the reason more real estate was bought was because the
person 'rendering' financial advice was a real estate broker who told
the person in question (it wasn't me) "oh, you don't want to pay the
highest rax rate [28%] on that $2M long-term capital gains from real
estate do you? Better if you defer the tax by buying some other real
estate via a 1031 Starker exchange!" Of course the key was the
advisor was a real estate broker who made a commission on the
exchange... I had advised the people in question to talk to a
certified financial advisor or competent tax preparer, but they were
concerned with the fee...penny-wise, pound foolish. And to double the
irony the AMT was specifically discussed, but the real estate broker
apparently gave bad advice.


.

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