"Benjamin Yazersky CPA" <johndoe[at]nowhere.com> writes:

- quote -

That depends on where you are in the AMT.

If your AMT income is such that you are in the
zone where the AMT exemption phases out, then
the nominal 15% rate on qualified dividends and
LTCG turns into an actual marginal rate of 21.5%
to 22%. This is an effect of the phaseout, not
a difference in the tax figured on qual divs
and LTCG.

Once your AMT exemption is totally phased out,
the actual marginal rate on qual divs and LTCG
drops back to 15%.

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

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"Paul Thomas" <paulthomascpa[at]bellsouth.net> writes:

- quote -

That's incorrect. Qualified dividends and long-term capital
gains are taxed at the same 5%/15% rate under the AMT as
under the regular tax and are NOT an adjustment/preference
item under the AMT.

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

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"Ted" <Ted666[at]yahoo.com> wrote:

- quote -


The AMT is quite complex & traps taxpayers from many
different angles. There are issues in high tax states
(income & property taxes). -many effectively lose some or
all of the benefit of these deductions. There are issues
with adjustments to income for AMT.

.... and this is just barely scratching the surface

Another side effect of AMT is that dividends & capitals
gains aren't taxed at 15%.

___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] > > -----> real address on hobokeni or hobokenx <-----

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"Ted" <Ted666[at]yahoo.com> wrote

- quote -

AMT is a combination of the types of income and your
deductions and exemptions. Too many of one, the other, or
both and AMT kicks in.

Oh, capital gains are an AMT adjustment item, as they do not
receive a favorable tax rate under AMT.

- quote -

If you can defer deductions, then do so. Otherwise defer
income, or types of income, if that's a possibility.

There's less than 14 days left.

--
Paul A. Thomas, CPA
Athens, Georgia

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Ted wrote:

- quote -

You're close, but it's not all deductions. The best list
I've seen appears at http://www.fairmark.com/amt/topten.htm
Even though that list shows as a 'top ten', my experience is
that the two largest triggers are Property Tax and State
Income Tax. Interest on first mortgages aren't a factor, nor
are charitable donations. For those who are impacted as a
one-time event (i.e. most seem to earn their way into AMT
land as their income passes a threshold so the higher State
Tax deduction drags them along) I observe that a long term
stock cap gain is the culprit. There's a chance of recouping
some of the AMT as a credit into the next year depending on
your situation.

The 2006 tax software programs are out. This is a good time
to get a copy and find out what your options are. You may
consider: Selling stock that has a loss (you can buy it back
31 days later if you wanted that stock in your portfolio for
the long haul) Paying the January mortgage now and getting
the extra month's interest deduction.

Donating stock you've held long term to charity, you avoid
the cap gain tax and get the full market value as a
deduction. If your property tax bill is due 12/1, payable by
1/2/07, you may consider making the payment in 07.

There are other triggers, of course, as the link above
describes, and other possible ways to avoid for each
trigger. But time is running short.

JOE
JoeTaxpayer.com

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As I understand it, AMT is a function of income and
deductions; too many deductions for the level of income and
some of them don't count.

Is all income created equal? If I am in trouble this year,
should I take some profits on stocks, or do capital gains
not count?

I suppose the other thing to do is to try to defer
deductions until next year. Any other suggestions? (next
year doesn't look to be a problem.)

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