Thanks everyone for your answers. I can see that I need to
talk with my accountant.

Steve

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"Justaguy" <missle[at]comcast.net> wrote:

- quote -

The AMT credit can be used in a future year when your
regular tax exceeds your AMT tax.

If married filing joint, the first $500,000 of gain
(SP-basis) is not a taxable gain. So your gain on sale of
the house would be quite large before it is taxable. I
assume you have held the house more than a year, so any gain
is long term.

The interplay of capital gain tax and AMT is not often
obvious. You would need to have someone run through the
numbers to see how this gain would affect the spread between
your AMT and regular tax.

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"Justaguy" <missle[at]comcast.net> wrote:

- quote -

The ability to make effective use of an AMT credit means
doing a LOT of planning. I would suggest that this is the
year to sell a chunk of the securities that gave rise to the
AMT credit. Have your accountant run what-if scenarios to
see what the optimum amount is. The basic idea is that to
use the credit you need to have your alternative minimum
taxable income lower than your regular tax income; the
above-mentioned securities are the way to do it. You can't
do this in the absence of other capital gains (like the home
sale) because the AMT capital loss is limited to $3,000,
just like for regular tax purposes. And a $3,000 loss
doesn't reduce AMT income enough to do much good.

--
Tom Healy, CPA
Boulder, CO
Web: http://www.tomhealycpa.com

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"Justaguy" <missle[at]comcast.net> writes:

- quote -

Consider getting a new tax preparer. AMT and AMT credit is
*not* linked to earned income.

- quote -

Possibly.

- quote -

This is tax law you're talking about.

Here's how it works:
(1) You compute your taxes under the regular tax (RT) system.
(2) Then you compute your taxes under the AMT system.
(3) If the AMT system number is higher than the RT system,
no credit for you.
(4) If the AMT system number is less than the RT system number,
you get an AMT credit equal to the *LESSER* of the available
credit and the difference between the numbers.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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Did you check out the exemptions to capital gains on the
sale of a personal residence owned and lived in for 2 of the
past 5 years? If your gain exceeds that allowable amount:

First look at form 8801 and determine if your prior year's
AMT payment qualifies as an AMT credit. If the AMT dates
back to 2003 or befor you should have already determined
this.

If it qualifies, then you will find that by completing a
second AMT Schedule D it's carryover to line 16 of form 6251
will have a substantial negative value, probably in the
amount of the house gain unless you have other losses or AMT
adjusted gains or carryover losses. Further completion of
form 6251 and 8801 will determine the amount of credit.

The amount of credit, if it is usable, will be *about* the
LTCG on the house, plus some amount between zero and $5,000
(unless you owed AMT this year also or had other AMT
adjustments), limited by the amount of usable AMT credit
from 8801. ed

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Hi. I have an AMT credit with the IRS for $150,000.00. I
am selling my home and will be making a large profit. I
have heard that the AMT tax will kick in once I sell my
home. However, my tax preparer says that my existing AMT
credit can not be used as the sale of a home is not
considered 'earned income'.

Is is possible that I can have an AMT credit with the IRS,
yet not be able to use it and I will have to pay additional
AMT taxes on my home sale? This doesn't sound right to me.

Any input would be appreciated.

Thanks,
Steve

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