At what point will I receive AMT?
September 13, 2006
Date: Mon, 24 Apr 2006
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!
Date: Fri, 05 May 2006
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.
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