ExpertHard1 markMultiple Choice
CPA · Question 50 · Area IV: Individual Taxation
Which of the following items is an adjustment (add-back) for the Individual Alternative Minimum Tax (AMT)?
Which of the following items is an adjustment (add-back) for the Individual Alternative Minimum Tax (AMT)?
Answer options:
A.
State and local income tax deduction.
B.
Charitable contribution deduction.
C.
Home mortgage interest on acquisition debt.
D.
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
A
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.
Practice the full CPA REG Practice Exam 5
72 questions · hints · full answers · grading
More questions from this exam
Q01A CPA is representing a client, TechSolutions Inc., in an IRS examination regarding a large resea...HardQ02A tax return preparer is engaged to prepare a return for a client who has engaged in a transactio...HardQ03Which of the following statements accurately describes the disciplinary authority of a State Boar...HardQ04A taxpayer filed their Year 1 individual income tax return on March 15, Year 2. The return showed...HardQ05A taxpayer disagrees with a proposed IRS deficiency and wishes to litigate the matter. The taxpay...Hard