Samson wrote:
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There are plenty of news articles out now about the bill that was just
passed, raising the AMT exemption levels - the base level of income that
is exempt from AMT. The bottom line is, the majority of people who were
subject to AMT on Monday aren't subject to AMT today, but those who fell
into it last year are likely to again this year.

AMT can affect those who exercise stock options, specifically ISOs
(incentive stock options), and the new bill didn't change that. You
don't always trigger AMT by exercising options, but that's one of the
"preference items" that gets people into the tax. See the Fairmark site
for a summary of AMT and ISOs: www.fairmark.com

And for tax year 2008, it's all on the table again...Congress just keeps
passing one-year "patches" instead of addressing the tax itself. If it
isn't patched again, AMT will be harsher in 2008 than 2007, and a 2007
exercise could save some taxes. Congress keeps passing these one-year
extensions though.

It is very difficult to figure out whether you'll pay AMT without
plugging all your numbers into tax-projection software...it would be a
good idea to talk with an accountant or other tax advisor if you're
planning an option exercise and are concerned with AMT. Otherwise you
can end up with a tax bill from an options exercise, even though you
haven't sold anything to raise cash.

-Tad

Very hard to link to Thomas. Try this instead:
http://thomas.loc.gov/cgi-bin/bssQue...ON+ACT+OF+2007

(click on HR 3996 for status/text of legislation; click on "Text" for text,
and then chose the last version - the one passed by House and Senate -
HR3996ENR).

I wrote in message news:RXRaj.33964$Pv2.2423[at]newssvr23.news.prodigy.net...
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"joeNOSPAM[at]bea.com" <joe.weinstein[at]gmail.com> wrote
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Am I misreading, or does the following imply the number is
closer to 25 million?

"Congress on Wednesday gave final approval to a plan that
will spare millions of middle-class taxpayers higher tax
bills for 2007. ... The tax reprieve postpones for one year
only an expansion of the alternative minimum tax, a parallel
tax system enacted in 1969 to prevent very wealthy investors
from using deductions and tax shelters to avoid paying
income tax altogether. The alternative tax has ensnared a
growing number of middle-class Americans in recent years
because the 1969 law was not indexed to inflation. Without
the fix by Congress, some 25 million filers would have had
to pay the tax on their 2007 income, up from four million
who paid it on 2006 income, according to the White House.
The Bush administration took a swipe at Congress, saying
that the late action by lawmakers might still cause delayed
refunds for up to 38 million filers. The measure would
increase slightly the amount of income that is exempt from
the alternative tax. For individuals, that means the exempt
amount increases to $44,350 in 2007 from $42,500 in 2006.
For married couples, the exemption amount climbs to $66,250
from $62,550."

http://www.nytimes.com/2007/12/20/wa...on/20cong.html

The largest annoyance may be a delay in updating tax
forms and e-filing software. But the IRS is getting used to
December law changes and may get this one out quicker.
Last time the delay was seven weeks and into Feburary.

The IRS Wednesday promised updated forms within 72 hours on their website.
That gives people enough time to react (5 trading days). Or, you can read
the law now (apparently still waiting for Bush to sign):
http://thomas.loc.gov/cgi-bin/bdquery/z?d110:h.r.03996:

Here's the text:
http://thomas.loc.gov/cgi-bin/query/.../~c1100LSWUs::

Very short, and accurately reported by the press - it increases the
exemption amount (the amount you subtract from your AMT income before taking
26%/28%) to $66,250 (joint) and $44,350 (individual).

See Form 6251, line 29 - change the numbers in the line's instruction
accordingly.
http://www.irs.gov/pub/irs-pdf/f6251.pdf
(there's also a phaseout of this exemption for high income - the change to
that phaseout isn't quite as clear, though it's hard to believe it would
amount to anything other than substituting the new numbers in the worksheet
for line 29).

It will affect anyone subject to AMT tax, because it reduces the amount of
income subject to AMT.

As always, this is for information purposes only, does not constitute
advice, and you should not rely upon it.

Mark Freeland
BnetOnewsX[at]sbcglobal.net

"Samson" <nospam[at]nospam.com> wrote in message
news:3mFaj.420$lo5.101[at]newssvr19.news.prodigy.net...
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On Dec 21, 3:54 am, "Samson" <nos...[at]nospam.com> wrote:
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Nothing to get worked up about. IIRC, they are bumping up the excluded
income amounts by a few percent,
for one year. Of the millions of people paying AMT this shaves about
250 thousand people off that
count.

I hear vague reports of changes to AMT. Does anybody know the specifics
that congress has proposed? Will this effect people who are exercising
company stock options? And should this be well understood before the end of
2007, a week from now, so that it can be acted on?

\Samson