Form 1120 Schedule M 3 Circular 2019-2024

Hi, this is Phil Jaeger, and I want to do a subject in regulation which is alternative minimum tax for individual taxpayers. Now, you have to know the formula. Let me go over the formula with you. You start with your regular taxable income from your 1040, so just go to 1040 and look at your taxable income. Then, you're going to add or subtract adjustments. Now, adjustments are additions or subtractions. And then, you're gonna add preference items. Now, that's going to give you alternative minimum taxable income, and you're going to subtract the exemption amount for AMT. Now, that will give me my tax base, which I'm going to multiply this two rates. But only remember, you multiply it by the AMT rate. Now, after you take your tax base and multiply it by your AMT rate, let me go over here. Alright, that will give me my tentative minimum tax before the alternative minimum tax foreign tax credit. Now, I didn't mention the foreign tax credit in our course, but I think for the exam, you should know it. So, let's add it to the formula tentative minimum tax before AMT foreign tax credit. Then, you're going to subtract the AMT foreign tax credit to give you your tentative minimum tax. Now, please remember this. If your tentative minimum tax exceeds the regular tax from your 1040, that is called alternative minimum tax. Take away the year. But, if the regular tax exceeds the tentative minimum tax, you don't have to send in any alternative minimum tax. Now, concerning the items, you have preferences and adjustments. Preferences, and by the way, one of the purposes we used to have was tax-exempt interest on private activity bonds. However, private activity bonds that are issued in 2009 and 2010 have...