Which of the following items is an adjustment (add-back) for the Individual Alternative Minimum Tax (AMT)?

Answer options:

State and local income tax deduction.

Charitable contribution deduction.

Home mortgage interest on acquisition debt.

Medical expenses in excess of 7.5% AGI.

How to approach this question

AMT Add-backs: 'PANICTS' (Passive loss, Accelerated depreciation, NOL, Installment income, Contracts, Tax deductions, Standard deduction). Taxes are the big one.

Full Answer

A.State and local income tax deduction.✓ Correct

State and local taxes (SALT) deducted on Schedule A are not deductible for AMT purposes and must be added back to taxable income to calculate Alternative Minimum Taxable Income (AMTI).

Common mistakes

Thinking charitable contributions are added back.

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