[Bhanu]

Can someone please explain this?

Robert had current-year adjusted gross income of $100,000 and potential itemized deductions as follows:
Medical expenses (before % 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 for alternate minimum tax?

A. $21,500
B. $25,500
C. $17,000
D. $19,500

[Fk]

@Banu, Only TOM CQ Is allowed as deduction for AMT rest are disallowed – TOM CQ – T Theft and Causualty , O – Other Miscelleaneous deduction without subject to limitation , Medical 7.5% – Charity and Qualified Home residence mortgage interest

Here we have to Assume TP is 65 and above.

Charity = 5000
qualified Home = 10000
Medical = 4500
Total 19500

Ans = d

Fk

[Bhanu]

Explanation

Choice “c” is correct. Robert's itemized deductions for alternative minimum tax purposes are calculated as follows:

Medical expenses (exceeding 10% of AGI) 2,000

State income taxes (not allowed) −

Real estate taxes (not allowed) −

Qualified housing and residence interest 10,000

Home equity mortgage interest (not used to buy, build, or improve the home-not allowed) −

Charitable contributions (no difference) 5,000

Alternative Minimum Itemized deductions 17,000

[Fk]

@ Bhanu , if the tax payer is below 65 then the answer is c

Fk

[Anonymous]

Even if the taxpayer is 65+ the answer is C. Alt min tax takes away the 65+ benefit. A good clue is that the question does not mention the age, so it should not matter and it doesn't. In all the 3 sections I have studied so far I have had to train myself to not try to think of additional info that is not provided in the question. Only consider what is given.

[Author]

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