[jiaxuanclaire]

I have one question about AMT and I got a little bit confused by the new medical expense 10%

For this question

Medical expenses (before percentage limitations) $12,000

State income taxes 4,000

Real estate taxes 3,500

Qualified housing and residence mortgage interest 10,000

Home equity mortgage interest (used to consolidate personal debts) 4,500

Charitable contributions (cash) 5,000

What are Robert’s itemized deductions that are allowable for alternative minimum tax purposes?

Is it only 10000+5000 then? since there will be no adjustment between federal and amt purpose for medical expense?

BEC: (07/13) 79-->done
AUD: (08/13) 62, (03/14) 68, (11/14)--?
REG: (05/14) 74, (07/14) 72, (10/14) 79-->done
FAR: (08/14) 80-->done

[Anonymous]

If I recall correctly, the AGI is $100,000 resulting in a 10% cap of medical expenses at $10,000.

$2,000 (excess medical) + $5,000 + $10,000 = $17,000

[lude4life13]

It doesn't matter what the AGI is in THIS question, which is why it says “before percentage limitation.” Usually it has the 10% rule, but not in this case.

[jiaxuanclaire]

The AGI is 100,000. My question is do we still need to add the percentage limitation, which in this case is 12,000-10%*100,000 since the law changed. There is no adjustment between regular tax and amt regard medical expense?

BEC: (07/13) 79-->done
AUD: (08/13) 62, (03/14) 68, (11/14)--?
REG: (05/14) 74, (07/14) 72, (10/14) 79-->done
FAR: (08/14) 80-->done

[Anonymous]

What's the answer? I'm fairly certain it's $17,000….

[jiaxuanclaire]

I know the answer was 17,000, but was for 2013 before the law changed…. I just want to see the effect after the law changed tested after July 1st, since now there will not be any adjustment between regular tax and amt for medical expense……

BEC: (07/13) 79-->done
AUD: (08/13) 62, (03/14) 68, (11/14)--?
REG: (05/14) 74, (07/14) 72, (10/14) 79-->done
FAR: (08/14) 80-->done

[Anonymous]

I now see what you're getting at. My fault.

[accountabergs]

Isn't the new law only that for taxpayers 65 and older, there will be a 7.5% threshold on sch A and and 10% threshold for AMT, resulting in a 2.5% difference?

And its still 10% for both sch A and AMT for regular taxpayers?

Passed in 2014

FAR- (5/27) 88
REG- (2/20) 70, Rematch: (7/2)83
BEC- (4/2) 85
AUD- (4/24) 87

Using Becker live classes and online materials

"if you get confused, listen to the music play"

[jiaxuanclaire]

I thought the new law eliminated the 2.5% difference……

BEC: (07/13) 79-->done
AUD: (08/13) 62, (03/14) 68, (11/14)--?
REG: (05/14) 74, (07/14) 72, (10/14) 79-->done
FAR: (08/14) 80-->done

[accountabergs]

I thought it used to be 7.5% for both sch A and AMT….. maybe I'm wrong. I am confused.

Passed in 2014

FAR- (5/27) 88
REG- (2/20) 70, Rematch: (7/2)83
BEC- (4/2) 85
AUD- (4/24) 87

Using Becker live classes and online materials

"if you get confused, listen to the music play"

[jiaxuanclaire]

Yes, it used to be 7.5%，and then I think it changed to 10% for people older than 65, then after July 1st, the material to be tested, it is 10% regardless of your age.

BEC: (07/13) 79-->done
AUD: (08/13) 62, (03/14) 68, (11/14)--?
REG: (05/14) 74, (07/14) 72, (10/14) 79-->done
FAR: (08/14) 80-->done

[highlightnumb]

@jiaxuanclaire

You brought up a very good point here which had me thinking to go back and review this topic. So it basically looks the regular tax deduction and the amt deduction will be the same. The 10% regular tax threshold deduction has now caught up to amt tax threshold deduction. The rules for age 65 or older 7.5% of AGI will still incur a difference vs the 10% threshold for AMT purposes. But yes like you said in your last post the AMT threshold is 10% regardless of your age. Good Point!

Mario Marcel, CPA

FAR. Feb 2014 76
REG. Jan 2015 79 half way there!!
BEC. Feb 2015 79 thank you God!!
AUD. Apr 20, 2015 and will be done. Hold that thought 65, 7/14/15 85!
Ok where was I? Oh thats right now I'm Done!!!!!!!!!
Ethics 92!!

"You down wit SEC?, yeah you know me!!!"

Cali Candidate

All Becker Materials, Wiley Test Bank, Ninja audio, Ninja MCQ, Ninja Notes

[highlightnumb]

so basically if an individual taxpayer under 65yo can deduct lets say 2,500 to arrive at taxable income then that 2,500 is allowed (not added back) for AMT purposes because they both have the same 10% threshold. Now if you're 65 or older and you deducted 2,500 for regular tax well that 2,500 will have to added back for AMT purposes because 7.5% was used for regular tax and AMT is 10%. Hope that makes sense.

Mario Marcel, CPA

FAR. Feb 2014 76
REG. Jan 2015 79 half way there!!
BEC. Feb 2015 79 thank you God!!
AUD. Apr 20, 2015 and will be done. Hold that thought 65, 7/14/15 85!
Ok where was I? Oh thats right now I'm Done!!!!!!!!!
Ethics 92!!

"You down wit SEC?, yeah you know me!!!"

Cali Candidate

All Becker Materials, Wiley Test Bank, Ninja audio, Ninja MCQ, Ninja Notes

[jiaxuanclaire]

@highlightnumb, thanks! I just looked up and the 7.5% threshold did not change for regular tax purpose for people older than 65 until year 2016. But shouldn't there be a 2.5% adjustment for people older than 65?

BEC: (07/13) 79-->done
AUD: (08/13) 62, (03/14) 68, (11/14)--?
REG: (05/14) 74, (07/14) 72, (10/14) 79-->done
FAR: (08/14) 80-->done

[Author]

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