* Alternative Minimum Tax
. Eliminates the Alternative Minimum Tax
(AMT) for corporations and increases the AMT exemption amounts and phase-out thresholds for individuals.
Calculation of the Alternative Minimum Tax
Regular tax calculations Scenario 1 Scenario 2 Scenario 3 Taxable income (assumed) $240,000 $240,000 $240,000 Regular tax liability $54,729 $54,729 $54,729 AMT calculations Preference items $25,000 $25,000 $25,000 (non-deferral items) Adjustment items ($25,000) $25,000 ($75,000) Tax base for AMT purposes $240,000 $290,000 $190,000 Tentative Minimum Tax $63,492 $77,492 $49,492 Alternative Minimum Tax
$8,763 $22,763 $ - Table 2.
To the extent the company is subject to alternative minimum tax
in a given year, they generate alternative minimum tax
A corporation qualifying as a "small corporation" is not subject to the alternative minimum tax
. A small corporation is a corporation that for its first tax year beginning after 1996 has average annual gross receipts not exceeding $5,000,000 for the preceding three-year period (if the corporation was in existence less than three years, then the test will be applied to whatever period it was in existence).
The sentence should read: "In the year of exercise, the bargain element is an alternative minimum tax
(AMT) adjustment added to taxable income."
Both plans call for elimination of the Alternative Minimum Tax
and a reduction in the number of tax brackets.
The Congressional Budget Office (CBO) has a longer time horizon, and scholars at the Brookings Institution have used CBO data to project what would happen if the alternative minimum tax
were adjusted and the tax cuts extended.
Perhaps the most significant legislative item contained in the revenue proposals was not a proposal, but a statement that the Treasury Department has been directed to study the alternative minimum tax
("AMT") with the goal of producing a long-term solution.
What they ended up paying was closer to $50,000--an additional $4,000 thanks to a little known "tax trap" called the Alternative Minimum Tax
* revising the alternative minimum tax
, so that millions of taxpayers are not forced to pay much higher taxes, as their incomes rise with inflation.
Archer's consumption tax - has different ways of addressing certain issues, such as double taxation, which in today's system results from the alternative minimum tax
. This issue can be handled in one of two ways: Either you treat income that is saved the way we treat pensions in that there is no tax on the saved income until you spend it.
Planning and Working With the Alternative Minimum Tax