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Alternative Minimum Tax
Old 12-18-2016, 03:48 PM   #1
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Alternative Minimum Tax

In 2015 I sold my business, so I had a significantly higher income than normal. As a result I was subject to the AMT.

I am pretty sure I know the answer to this, but I'll throw it out there anyway:

Are any of the unused deductions/exemptions allowed to be carried over for the next year?
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Old 12-18-2016, 06:54 PM   #2
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Not to my knowledge.........but just in case you got a state tax refund, my impression is that you don't have to declare it as income since you got no benefit from the deduction.
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Old 12-18-2016, 07:03 PM   #3
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Not to my knowledge.........but just in case you got a state tax refund, my impression is that you don't have to declare it as income since you got no benefit from the deduction.
you have to qualify that. You don't have to declare any part that you did not get a benefit on. I had this happen before. I had AMT one year and got a refund. The next year when the refund came in, I needed to figure out what part was taxable. In my case the I saw some benefit... but not for all of the refunded dollar. So only part of the refund was taxable.

So kaneohe is right that you may not have to declare part or all or your state tax refund as taxable.
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Old 12-18-2016, 07:33 PM   #4
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Stung by the AMT as well. I am still trying to figure out a way around it.
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Old 12-18-2016, 07:38 PM   #5
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you have to qualify that. You don't have to declare any part that you did not get a benefit on. I had this happen before. I had AMT one year and got a refund. The next year when the refund came in, I needed to figure out what part was taxable. In my case the I saw some benefit... but not for all of the refunded dollar. So only part of the refund was taxable.

So kaneohe is right that you may not have to declare part or all or your state tax refund as taxable.
bb........thanks for the i dots and crossed t's. I guess I could say I meant to say you don't have to declare it IF you got no benefit from it. I know that if you itemize vs std deduction, my intuition says it is obvious that if your itemized deductions are just barely over the std deduction, you may not get full benefit of state income taxes or mortgage interest (unlike what some realtors want you to think). I'll have to think about that w/ AMT where none of your state/local
taxes are used ......not obvious to me at this pt. how you would benefit.

but you are perfectly correct in what you said........if you benefited, you have to declare that part as income.

btw........if anyone knows how to determine how much of the state refund to include in federal income if you were subject to AMT that yr, pls send a link or something. Looks not obvious to me at this pt. Thanks.
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Old 12-18-2016, 09:16 PM   #6
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Back when I had qualified stock from an options program and paid AMT upon exercising them, I was able to carry over the AMT basis to the years where I finally sold the stock. So that helped. But no other exemptions that I know of can be used in future years.
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Old 12-19-2016, 06:38 AM   #7
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bb........thanks for the i dots and crossed t's. I guess I could say I meant to say you don't have to declare it IF you got no benefit from it. I know that if you itemize vs std deduction, my intuition says it is obvious that if your itemized deductions are just barely over the std deduction, you may not get full benefit of state income taxes or mortgage interest (unlike what some realtors want you to think). I'll have to think about that w/ AMT where none of your state/local
taxes are used ......not obvious to me at this pt. how you would benefit.

but you are perfectly correct in what you said........if you benefited, you have to declare that part as income.

btw........if anyone knows how to determine how much of the state refund to include in federal income if you were subject to AMT that yr, pls send a link or something. Looks not obvious to me at this pt. Thanks.
Sorry, this was such a pain when I had it happen that I just can't for get the pain. I was using TaxAct and they had an all or none calculation. I have not looked for a link for this, but in general what I had to do was go back to the previous years taxes and adjust the state tax until it no longer changed my taxes owed. From where it started (full state tax paid - max state tax that had some effect) is the state tax refund that is taxable. If the difference is greater than your state refund, then the whole refund is taxable. TaxAct and the IRS agreed what I did was correct and just put in the taxable part of the state refund input.

Hope that helps
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Old 12-19-2016, 07:02 AM   #8
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I read this complication goes away next year. Doesn't help you I know.
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Old 12-19-2016, 07:17 AM   #9
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Two ideas I saw earlier -

Check your state tax penalties, and if it works out, delay paying state taxes until next year. Also, if you are going to pay AMT anyway, look for ways to accelerate your income this year so that you pay at the lower AMT rate.
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Old 12-19-2016, 07:44 AM   #10
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Two ideas I saw earlier -

Check your state tax penalties, and if it works out, delay paying state taxes until next year. Also, if you are going to pay AMT anyway, look for ways to accelerate your income this year so that you pay at the lower AMT rate.

The state tax is interesting, because I was under-withheld last year, due the sale of the business. So I paid something along the order of 7K of my 2015 state income tax in 2016.
So it seems to me that had I withheld that in '15 I would have not been allowed the deduction, but since I paid it in '16, and I will not be subject to AMT in '16, I can deduct that payment in '16.

I guess. Unless I have to go back and try to figure out how much of that payment would would not have been allowed?
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Old 12-19-2016, 08:18 AM   #11
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Sorry, this was such a pain when I had it happen that I just can't for get the pain. I was using TaxAct and they had an all or none calculation. I have not looked for a link for this, but in general what I had to do was go back to the previous years taxes and adjust the state tax until it no longer changed my taxes owed. From where it started (full state tax paid - max state tax that had some effect) is the state tax refund that is taxable. If the difference is greater than your state refund, then the whole refund is taxable. TaxAct and the IRS agreed what I did was correct and just put in the taxable part of the state refund input.

Hope that helps
I was dreaming about this last nite. I think I can intuit the std vs itemized
deduction w/ a stacked bar chart (state inc. tx on top) but I couldn't figure
anything similar for AMT. Only thing I could think of is a brute force method like what you suggest so I appreciate your confirmation. Better do it before they change the numbers in the free calculators if not too late already. Thanks!
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