Arthur Kamlet <-To[at]panix.com> wrote:

- quote -

My understanding is that Form 8801 is unrelated to the the issue of
correct calculation of Line 10, Form 1040, which according to
the 1040 instructions Page 22 is a number influenced by
whether you paid AMT the previous year. This covers any refunds
of state income tax and property taxes, for which you can in fact
carry forward an AMT asset that would not gain you anything on form
8801 itself; and this is the situation potentially affecting the
original question in this thread.

Steve

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In article <c_jsl.13853$W06.879[at]flpi148.ffdc.sbc.com> ,
Mark Bole <makbo[at]pacbell.net> wrote:
- quote -


To expand on Mark's perplexity, the two examples he gave of
Timing Issues that speed up payment of AMT, and therefore
create potential AMT credit, are probably the only AMT timing
issues most of us will ever see.


How do people create AMT credits, which as Mark noted come
only from timing issues? Ah, the magic of software. Just plug
in numbers on input screens or interview questions, and behold,
AMT Credits where none had gone before.
--
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

--
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Mark Bole <makbo[at]pacbell.net> wrote:

- quote -

True, with one possible exception, although I've never heard of
this actually happening: if you sell the property early in
the tax year following the year in which you paid the AMT,
and the buyer paid you for pre-paid property taxes, you
could maybe avoid paying some tax on this buyer payment on the theory
that you did not gain the complete economic benefit from
when it was deducted.

This is not necessarily that far-out a scenario, so I suspect
it's been tried although I know of no examples of it.

Steve

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kupchik[at]hotmail.com wrote:

- quote -

That's a perfectly good reason, and always valid to take state impacts
into account. (In California, AMT exemption is currently so high that
most everyone who sees federal AMT sees none for CA, so your reasoning
would apply).

I don't know what the IRS does with a 1040X showing neither refund nor
balance due.... probably not a high priority for them. The consistency
you are searching for may be an illusion, unless your state is so
tightly tied to the IRS database that it has become the best way to get
an update to happen.

You could also try just attaching a revised federal Schedule A (or E or
C or whatever) to the amended state return(s) as documentation, in lieu
of a full-blown federal amendment.

-Mark Bole

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Steve Pope wrote:

- quote -


You mean an AMT credit carryover on Form 8801? Increase in real
property taxes would not help. I'm still trying to figure out how
people with no knowledge of any AMT deferral items (ISO's, depreciation)
still seem to end up with carryover amounts on Form 8801 for prior years...

-Mark Bole

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Phil Marti" <prm20871[at]verizon.net> wrote in message
news:mfZrl.1545$%u5.636[at]nwrddc01.gnilink.net...
- quote -

I'm with Phil on this one, your explanation is about a simple and straight
forward as it gets.

The problem here is with the client, not necessarily with you. I had a
client a few years back with a lot of employee business expenses (well over
$50,000). No matter what I told him about the AMT he insisted that we put
them all on his return, so I accommodated him. He got audited and ALL I
TOOK TO THE AUDIT was proof of about $5K. What I found most interesting is
the ONE HOUR argument I had with the IRS auditor on North Capital Street in
DC. This ninny was insistent that we produce documentation for EVERYTHING
claimed on the return even though I said we'd roll over on all but this $5K.
After more than an hour of explaining to the auditor how the AMT worked I
gave up and asked for his supervisor. The remainder of the audit - which
resulted in a NO CHANGE - took all of 15 minutes.

Sometimes people simply will NOT believe that more deductions don't help.
As an aside, In My Professional Opinion as an EA with over 25 years
experience, we will NEVER see a real solution to the AMT. Not only does it
raise BILLIONS for the government but it is the only true nonpartisan
section of the code I've ever seen. It allows every politician, democrat,
republican, independent, libertarian, communist, socialist, etc. ad nauseum,
to pound their first and tell us how much they are going to CUT our tax
rates and make things better. BUT once that damnable AMT kicks in all the
tax breaks go out the window.

The other issue I see in your post is that you have a client who has NO
FAITH in you. And again this is my professional opinion - you need to quash
that RIGHT NOW or you are asking for trouble. There is nothing wrong with a
client who has questions, in fact we should all encourage all our clients to
understand, as best they can, their individual tax situations. But when a
client simply refuses to believe the professional he is paying to do a job,
that professional needs to be prepared for a law suit. Clients that don't
like what you have to say are with you for one reason only - you are the
cheapest guy in town. These people will "opinion shop" and as soon as they
find someone who give them what they want one of two things (and sometimes
both) will happen.

First, they will leave you in a New York minute;
Second, they will look for a way to sue you to recover the fee they paid
because OBVIOUSLY you did it wrong.

In this particular situation, if this were my client and the amended return
resulted in change to the bottom line, I would recommend against even filing
the 1040X - no benefit (to either the IRS or the client) means no need).

But let me guess - I'll be your original fee was low and I'll be you're
doing the amended return for free - PLEASE let us know!

Be careful and good luck (and raise your fees for all the grief you're
getting),
Gene E. Utterback, EA, RFC, ABA

--
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On Mar 5, 11:21*pm, "Gil Faver" <rowdy'sb...[at]xxyz.com> wrote:
- quote -

The reason that I am filing an amended return is because it reduces
taxes due in both NY & NJ. I believe it is also a good idea to file
the Federal amended return so that all info is consistant.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Gil Faver <rowdy'sboss[at]xxyz.com> wrote:

- quote -

So as to create a larger AMT tax asset?

Steve

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Mark Bole" <makbo[at]pacbell.net> wrote in message
news:Hh_rl.17748$YU2.1350[at]nlpi066.nbdc.sbc.com...
- quote -

That's what I was wondering. Then it dawned on me that the taxpayer assumed
that with this added, legitimate deduction, his taxes would go down. Now
that it has been shown that they would remain the same, why not drop the
idea of filing an amended return?

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

kupchik[at]hotmail.com wrote:
- quote -


If the other replies don't help your client, I have two suggestions:

1) emphasize the word "minimum" in AMT. It is designed to make sure you
pay a certain amount of tax no matter what, it works very well. The
mechanics of how it does this might be of interest if your client is
inclined to the bean-counting side of life.

2) why in the world are you bothering to file an amended return?

-Mark Bole

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

<kupchik[at]hotmail.com> wrote:

- quote -

I think you just gave about as simple an explanation as there is. The only
thing you might want to add is showing him the before and after numbers for
lines 44 and 45 of the 1040 so he can see that one goes down and the other
goes up the same amount.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

<kupchik[at]hotmail.com> wrote in message
news:96e7bbfa-f73c-4586-9827-88e7d6d58e8b[at]s19g2000vbp.googlegroups.com...
- quote -

Simple: State, local, and foreign taxes (on Schedule A) are not deductible
under AMT, so his amendment changes nothing. He may subtract these items
for computing the regular tax, but as he has to add them back in (to
taxable income under the regular system), the change to his AMTI is zero.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Mar 5, 2:30*pm, "Phil Marti" <prm20...[at]verizon.net> wrote:
- quote -

Client does not understand why his Federal tax did NOT change when we
added additional local real estate tax to his return. The simple
explanation I was referring to was not for the 1040X but why the 6251
still calculates the same total tax due (AMT increrases by the same
amount that regular tax is reduced), which I believe it should since
the real estate tax is not a deduction for AMT.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

<kupchik[at]hotmail.com> wrote:

- quote -

I don't understand what you need an example of. Lines 2, 3 & 5 will show
the change. Everything else through Line 15 will be the same in Columns A &
C, and the rest is math. You'll attach the revised Schedule A and 6251.

--
Phil Marti
Clarksburg, MD

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

I have a client who is filing an ammended return due to additional
local real estate taxes paid. His Federal total tax liability has
not
changed due to the fact that he pays AMT and that the real estate
taxes are a preference item when calculating the AMT tax.

Does anyone have a simple example that he and I can review?

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >