At what point will I receive AMT?
September 13, 2006
Date: Mon, 24 Apr 2006
From: Yeutang
Dear Michael Gray,
I am married and have a 1.5 year old child. We will file a joint income tax return for 2006.
I am considering buying a hybrid car. (The dealer says we can get a $3,150 tax credit for a Prius.) The credit is only allowed for the excess of the regular tax after other credits over the tentative minimum tax.
Scenario 1 – Total wages $120,000, capital gains $60,000. Will we have an AMT?
Scenario 2 – Total wages $120,000, capital gains $300,000. Will we have an AMT?
What is the maximum income that we can have and still qualify for the $3,150 credit?
Your help is very appreciated!
Yuetang
Answer
Date: Fri, 05 May 2006
Hello Yuetang,
You haven't given me enough details to compute the AMT. There are many factors involved, including your state income tax situation, whether you have property taxes for a residence, and whether your capital gains are long-term or short term.
I recommend you meet with a tax advisor and pay to have him or her work through your particular situation.
Another issue – we don't know what the AMT exemption will be for 2006. Congress has been arguing over this for the last seven months. If we're lucky, there might be a resolution in a couple of weeks.
Good luck!
Mike Gray
For answers to new questions, subscribe to our newsletter, Michael Gray, CPA's Tax & Business Insight by filling out the form below.
Home Newsletter Archive Introducing Michael Gray, CPA Articles Tax FAQ Need Help? Other Links
© 2025
Connect on LinkedIn
Connect on BlueSky
Connect on Instagram
Our Blog