Discussion:ALTERNATIVE MINIMUM TAX FOR MARRIED FILING SEPARATE
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Discussion Forum Index --> General Chat --> ALTERNATIVE MINIMUM TAX FOR MARRIED FILING SEPARATE
| 2 October 2013 | |
| High income taxpayer is filing as married filing separate. For alternative minimum tax the IRS instructions requires an additional amount of $39,375 to be added to alternative minimum taxable income. Taxpayer income is high and the exemption for alternative minimum tax is zero. Why is the addition of the $39,375 required? | |
| 3 October 2013 | |
| Is this the instruction you are reading?
"Note. If Form 6251, line 28, is equal to or more than: $314,900 if single or head of household, $465,000 if married filing jointly or qualifying widow(er), or $232,500 if married filing separately, your exemption is zero. Do not complete this worksheet; instead, enter the amount from Form 6251, line 28, on line 30 and go to line 31." If so, where does it say to add the $39,375? | |
| 3 October 2013 | |
| Instruction for Form 6251, page 9 Line 28- Alternative minimum Taxable Income
"If your filing status married filing separately and line 28 is more that $232,500, you must include an additional amount on line 28. If line 28 is $390,000 or more, include an additional $39,375." | |
| 4 October 2013 | |
| I see what you are saying. Makes no sense to add it. It would be a double-up unless it then got subtracted below somewhere. What does your software do? I can't imagine this has not arisen before now. The right answer, I think, is that at real high incomes, the MFS taxpayer completes through Line 28 like any other taxpayer, then puts 0 on Line 29 and go from there. Odd, though. Are we missing something? | |
| 4 October 2013 | |
| Tax software add the $39,375 to each return. I use CCH ProSystem fx
Results in additional AMT for married filing separate versus the joint tax return. I used status of married filing separate to avoid the 1% CA mental health tax, save $10,000. Now for federal additional AMT for each spouse results in higher AMT of $22,050 over the married filing joint. | |
| 4 October 2013 | |
| I think we need to go back to the statute. If the instructions say it, and the software does it, we may have missed something. | |
| 4 October 2013 | |
| Sec 55(d)(3) contains this regarding phaseout: "In the case of a taxpayer described in paragraph (1)(C), alternative minimum taxable income shall be increased by the lesser of (i) 25 percent of the excess of alternative minimum taxable income (determined without regard to this sentence) over the minimum amount of such income (as so determined) for which the exemption amount under paragraph (1)(C) is zero, or (ii) such exemption amount (determined without regard to this paragraph)." | |
