On Apr 25, 7:09*pm, KEBSCHU...[at]aol.com wrote:
- quote -

I find your repeated beating of dead horses to be objectionable. I
find what I see as your repeated interference in the orderly process
of inquiry and responses on this and other tax discussion boards to be
objectionable.

Why don't you visit the MSN.COM discussion board, Tax Corner? (http://
moneycentral.msn.com/community/message/board.asp?Board=TaxCorner) If
you refrain from criticizing the people who run that board you can
pretty much say or do anything you like there.

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On Apr 24, 10:52�am, Bill Brown <brow...[at]longwood.edu> wrote:

- quote -


What facts in my posts in this thread do you find objectionable?

Cheers,

WDK

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

For moderator:
Dick, how much slack are you going to give this individual?

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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. > << ------------------------------------------------------- >

On Apr 22, 4:22�pm, spop...[at]speedymail.org (Steve Pope) wrote:
- quote -

No, I accept that the $7991 state income tax refund reported on Line
10 of President Obama's 2008 federal income tax return was determined
correctly and I assume that the refund was a result of a state income
tax overpayment in 2007. It is clear that only the regular tax was
paid by President Obama in both 2007 and 2008.

The President paid tax on the $7991 state income tax refund recieved
in 2008 because he paid only the regular tax.

Now here is the issue.

If the President was required to pay the AMT in 2008 rather than the
regular tax, would his accountant have followed the Internal Revenue
Code or IRS instruction in determinining whether or not the $7991
refund was included in alternative minimum taxable
income?

The instruction on Line 8 of Form 6251 calls for entering the amount
on Line 10 of Form 1040 as a NEGATIVE number, thereby excluding the
state income tax refund from alternative minimum taxable income.

Now here is what section 56(b)(1)(D) of the Internal Revenue Code
provides,

(D) Treatment of certain recoveries
No recovery of any tax to which subparagraph (A)(ii) applied shall be
included in gross income for purposes of determining alternative
minimum taxable income.

Here is what section 56(b)(1)(A)(ii) provides when a taxpayer pay the
AMT,

b) Adjustments applicable to individuals

In determining the amount of the alternative minimum taxable income
of any taxpayer (other than a corporation), the following treatment
shall apply (in lieu of the treatment applicable for purposes of
computing the regular tax):

(1) Limitation on deductions
(A) In general
No deduction shall be allowed -

(ii) for any taxes described in paragraph (1), (2), or (3) of
section 164(a). Clause (ii) shall not apply to any amount allowable in
computing adjusted gross income.

Based on the Internal Revenue Code, when the AMT is paid, a state
income tax is not deductible in determining AMTI under section 56(b)(1)
(a)(ii), therefore a refund of a tax that was not allowed as a
deduction in determining AMTI would not be included in AMTI under 56(b)
(1)(D).

Now where is the justification in the Internal Revenue Code for IRS's
instruction on line 8 of Form 6251 (2008) for excluding from AMTI the
refund of a tax overpayment that provided a tax benefit in a year the
regular tax was paid?

To close the circle, Section 56(b)(1)(D) is necessary because Section
164(a)(3) provides that a state income tax is deductible in
determining regular taxable income and as a consequence a state income
tax overpayment can provide a limited long-term capital gains tax rate
based tax benefit when the AMT is paid because the calculation of the
capital gains portion of the AMT involves regular taxable income
excluding capital gains.

Cheers,

WDK

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

<KEBSCHULLW[at]aol.com> wrote:

- quote -


I'm assuming you meant 2007 in the two places I noted.

The answer is he may not have to pay tax on part of all of the refund.
Details have been debated here at length.

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. > << ------------------------------------------------------- >

In article <fedac329-dacc-4071-b489-bcc4d57de407[at]t11g2000vbc.googlegroups.com> ,
<KEBSCHULLW[at]aol.com> wrote:
- quote -


I do my own "tax benefit" calculations, determining how much of the
state tax refund provided a tax bnefit even though there was AMT.


I use a simple minded method: Do a what-if with and without
that amount of state tax deduction, and if no difference, no
tax benefit. Sometimes there is a partial benefit and then
trial and error withWhat-ifs work fine, though Ultratax's
worksheet (not the IRS worksheet); works for me.
--

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

--
<< ------------------------------------------------------- > << 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 Apr 22, 2:40�pm, kam...[at]panix.com (Arthur Kamlet) wrote:
- quote -

Art:

I did not follow your response.

Allow me to clarify my post.

President Obama's 2008 Federal Income Tax Return showed a $7991 state
income tax refund on Line 10 of Form 1040 that was taxable because he
paid the regular tax in 2008. (The refund was from a year that he paid
the regular tax.)

What would have happened with that $7991 if he had been required to
pay the AMT in 2008?


Would the $7991 been included in AMTI for 2008 per the Internal
Revenue Code or
would it have been excluded per the bollixed IRS instructions on Line
8 of Form 6251. The instruction does not conform to section 56(b)(1)
(D) of the IRC.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

In article <c1e88dc8-b203-4f96-90be-a0127e03af1e[at]r37g2000yqn.googlegroups.com> ,
<KEBSCHULLW[at]aol.com> wrote:
- quote -


Since the situation did not arise, this is merely a hypotheical
question for your favorite tax topic, right?


While I can't answer this particular question, I can say that
the Thompson-Reuters (formerly Creative Solutions) UltraTax
does seem to do a pretty good job of pointing out there was
AMT last year and the taxable line 10 amount was based on
that, and it issues an FYI diagnostic advising we manually
recheck their calculations, which they indicate in a worksheet.


If this didn't proforma from last year, their worksheet lets you
tell it some important figures so it can run its own calculation
for taxable line 10 amounts.


It would not surprise me to learn their software does a better
job of calculating line 10 taxability than the IRS does.


UltraTax does follow the "traditional" interactions of line 10 with
social security taxability that I understand you disagree with, but
having heard from you many times on the issue, will not get further
into it.
--

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

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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. > << ------------------------------------------------------- >

President Obama's 2008 Federal Income Tax Return showed a $7991 state
income tax refund on Line 10 of Form 1040 that was taxable because he
paid the regular tax.

What would have happened with that $7991 if he had been required to
pay the AMT?

Would the $7991 been included in AMTI per the Internal Revenue Code or
would it have been excluded per the bollixed IRS instructions on Line
8 of Form 6251. The instruction does not conform to section 56(b)(1)
(D) of the IRC.

Cheers,

WDK

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >