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Grey: Well, here's a spin on that question. If a single member LLC is ignored for tax purposes, would an LLC with several holding corporations for a person's other assets/stocks count as multiple legal entities, and make the LLC valid for tax purposes?

There is no such entity as an LLC for tax purposes. An LLC is always taxed as some other entity.

For a single owner, an LLC is ignored for tax purposes. If there is more than one member of the LLC, it is treated like a partnership by default.

However any LLC can elect to be taxed as a C corporation or as an S corporation.

Also, maybe all the loopholes have been closed, if so what's the point of having alternate minimum tax if nobody can find loopholes to avoid most or all of their taxes?

There are still loopholes. Oil & gas get a bunch of write offs not available to other businesses - including getting a pass on the passive activity rules. Writing off your employee business expenses is an AMT issue, as is paying state income taxes.

Is it just to catch tax payers who have no dividends and live on capital gains?

Dividends and capital gains are taxed exactly the same under the regular tax and AMT.

Or is it an out-dated hold over that just lingers on?

In reality, that is more like it. Unlike pretty much every other item in the tax code, the AMT doesn't have any indexing for inflation. So over the years, it has slowly caught more and more taxpayers as the regular tax gets indexed for inflation. It's basically functioned as a "I don't have to vote for a tax increase" loophole for Congress. If they do nothing - arguably their highest and best use - the AMT will serve to increase taxes. That gives the Congress-critters money to spend on their pet projects without having to vote FOR a tax increase. What could be better for them? They can look their constituents in the eye and show them the things they're doing without voting for a tax increase.

Therefore, I don't see any long-term fixes to AMT in the near future.

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