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.
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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.
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.
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