AMT Income

The starting point for determining your AMT income (AMTI) is your regular taxable income. Almost all of the adjustments increase that amount. Personal exemptions are not permitted and you must add back the amount of those reductions.

Several other common deductions that reduce regular taxable income must also be added back. They include:

• State or local taxes

• Miscellaneous itemized deductions above the 2% threshold

• Medical expenses not in excess of 10% of adjusted gross income. (The threshold for regular tax purposes is 7.5%)

• Certain mortgage interest

• In addition there are special rules regarding the treatment of Depreciation, Incentive Stock Options and Tax-Exempt interest from certain private activity bonds.

After applying the regular rules and then recalculating everything under the alternative minimum tax you arrive at income for AMT purposes.