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Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121565  
Subject: Re: Buffett's Tax Bill Date: 10/13/2011 11:49 AM
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I understand cap gains and dividends, but with AMT, how do you show $63 million AGI and still get down to 11% tax of AGI?

AMT doesn't affect the cap gain/dividend rate or the charitable deduction, and the high-income reduction of itemized deductions doesn't apply after 2009.

I'll simplify the numbers a bit and make some things up just for show and tell.

AGI: $60 million
LTCG: $60 milliion
Charitable Contributions: $30 million

Since he doesn't get personal exemptions under AMT his taxable income is $30 million, and 15% of that is $4.5 million. That's 7.5% of $60 million. (It actually would be a little less because of the 0% tax up to the top of the 15% bracket.)

Phil
Rule Your Retirement Home Fool
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