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URL:  http://boards.fool.com/were-missing-some-info-here-lt-cap-gain-71435-30853037.aspx

Subject:  Re: amt for 2013? Date:  9/2/2013  12:34 PM
Author:  ptheland Number:  119113 of 121177

We're missing some info here.

LT cap gain: 71,435.

RMD: 71,322.

Taxable SS: 37,137.

AGI: 175,019.


When I add those three, I get 179,894.


St Deduct: (14,600).

3 Exempts: (11,700).

Taxable Inc: 148,719.


So you're married, both of you are over 65, and you have an additional dependent in the house. I'm still off by the difference in AGI, but I'll go with your numbers anyway.


Tax: 21,885.

Working through the schedule D tax worksheet (and adjusting the 2012 worksheet for 2013 tax rates), I get 21,894. Close enough for this exercise.


My attempt at AMT:

Let's just start over on that.

We'll assume your AGI is the same as your AMTI (which is fairly reasonable in your case).

The phase out of your AMT exemption begins at 153,900 of AMTI. You're 21,119 over that. And you lose $1 of exemption for every $4 over the threshold. So divide 21,119 by 4 and we get $5280 of lost exemption and a remaining exemption of 75,520. So we've got:

AMTI 175,019
Exemption 75,520
AMT taxable 99,499

We still get the benefit of the 15% rate on your LTCG. So that leaves 71,435 taxed at 15% and 28,064 at 28% (some of that will be at 26%, but I generally just use 28% for planning). Doing the math, I get 10,715 plus 7,858 for a total of 18,573 of AMT.

That's less than the regular tax, so I'm not coming up with any AMT at all. I'd take a closer look at the details of the TT "what if" scenario and see how it's coming up with a lot more AMT.

--Peter
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