dickenjb wrote:Think of it as a badge of honor - it means you make enough to pay AMT. (But not enough to NOT pay AMT).
Ha. A glass half-full perspective for sure.
grabiner wrote:Is the AMT due to timing item (such as depreciation)? I wouldn't expect AMT in your situation, but if you lost $5000 on the rental property according to the regular tax rules, and gained $20,000 according to the AMT rules, that might be the reason you are paying AMT.
I don't think it is a timing thing. My rental is my old house that I decided to keep when I made a cross country move. On a purely cash basis, I had only a nominal amount of positive income from it. I had a small loss after factoring in depreciation. I think the AMT hit is coming from the number of exemptions I have (but I don't think a family of 5 is out of the norm).
Calm Man wrote:I just did my taxes and I will pay AMT for the first time in many years. The reason? Well, by throwing in various numbers I can see that as I INCREASE income, my AMT goes down (of course the total tax goes up). So the culprit was that I earned a fair amount LESS in 2012. It seems when you are at or around the 33% marginal bracket and have a reasonable amount of deductions and exemptions, you get hit with it. In essence, AMT is 28% x AGI - $3500 once over 175K. But at taxable incomes around 200K, the marginal rate is 33% and this is where the disparities begin. My only deductions are 2 exemptions and NJ state income tax (plus charity which doesn't count),. Those get completely obliterated.
So are you thinking that the AMT hit is greatest at the lower end of the 33% bracket? I don't think that would account for it in my case as I am not at the bottom of the bracket.
It is what it is I guess, it is just kind of frustrating. I am basically a wage earner not doing anything unique or extraordinary to reduce my taxes under the regular system. I do not think I am the person the AMT originally was designed to affect.