Exam 13: At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

To be considered a material participant in an activity, a taxpayer must meet all of the seven tests prescribed in the regulations.

The at-risk amount is increased each tax year by:

Cal reported the following itemized deductions on his 2015 tax return. His AGI for 2015 was $85,000. The mortgage interest is all qualified mortgage interest to purchase his personal residence. For AMT, compute his total itemized deductions.

Gifts to charity are not allowed for AMT purposes.

Most real estate debt meets the requirements of qualified nonrecourse financing.

Generally, the gains and losses recognized for regular tax purposes are the same amount as the gains and losses recognized for AMT purposes.

Jonathan is married, files a joint return, and has one child. During 2015, Jonathan has $85,000 of taxable income. He has $20,000 of positive AMT adjustments and $28,000 of tax preferences. Since Jonathan rents his home (pays no mortgage interest) and lives in Florida (has no state income tax), he does not itemize his deductions but takes the standard deduction. Calculate Jonathan's AMTI (before exclusion amount).

Baird has four passive activities. The following income and losses are generated in the current year. How much of the $60,000 net passive loss can Baird deduct this year? Calculate the suspended losses (by activity).

AMT depreciation of personal property is calculated using which method?

Alice is an attorney and earned $175,000 from her practice in the current year. Alice also owns three passive activities. The activities had the following income and losses: What is Alice's adjusted gross income for the current year?