Alt Min Tax from Capital Gains

I expecting the rule that capital gains by themselves won't trigger the AMT.

Surprise! The next year, the Ohio taxes paid on the capital gain income cause a deduction which triggers the Federal AMT.

This is on capital gains alone.

Just as well I sold in 2007, however.

Reply to
Ron Hardin
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in article snipped-for-privacy@mindspring.com, Ron Hardin at snipped-for-privacy@mindspring.com wrote on 3/15/09 1:43 PM:

Capital gains are taxed the same under AMT as they are under the regular system. It is the level of income which triggers AMT, not the capital gains themselves. As AMTI rises above $150,000, you begin to lose the AMT exemption at the rate of 25%. Net result is that $1 in capital gains raises AMTI $1.25.

Uncompensated advice guaranteed correct or double your money back

Frank S. Duke, Jr. CPA Cincinnati, OH USA

Reply to
Frank S. Duke, Jr.

That's pretty much it.

Ron, you can find AMT popping up even if there's no state return.

Kaye Thomas takes a few more words than Frank to explain the same problem -- capital gains increases income which pops you over the AMT exemption amount.

See

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Reply to
Arthur Kamlet

Well, it's beyond human comprehension; in my case, however, there's no capital gain for 2008 (in fact, surprise!, a loss). The AMT comes entirely from the deduction of the Ohio tax due in 2008 on the capital gain in 2007, which deduction is big enough to trigger the AMT, if I understand it.

That there's also a phaseout that hits the AMT in the same year as the capital gain is just additional perverse data, but I think I missed that.

But who knows what turbotax is doing.

Reply to
Ron Hardin

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