Andrew who si single and 45 years old has taxable income for

Andrew, who si single and 45 years old, has taxable income for the current year of $155,000. His allowable itemized deductions consist of charitable gifts, $5,000; state sales taxes, $3,000; morgage interest (on acquisition debt), $10,000; property taxes on home $2,000. He also received $1,000 of private activity municipal bond interest income. What is his alternative minimum taxable income for the current year?

a. $176,000

b. $171,000

c. $161,000

d. $160,000

e, $156,000

Solution

Ans. (c) $161,000

Ragular Taxable income = 155,000

Add :- State Sales Tax = 3,000

Add:- Property Tax = 2,000

Add:- Bond Interest income = 1,000

Alternative minimum taxable income = $161,000

Note:- Charitable gift and mortgage intrest is deductable