Problem: AMT Adjustments and Computation of Tax. Allen, a single taxpayer, reports the following items on his 2007 federal income tax return:
Adjusted gross income $75,000
Taxable income 48,000
Regular tax liability 8,424
Tax preferences 20,000
Itemized deductions including:
Charitable contributions 7,500
Medical expenses (before AGI floor) 10,000
Mortgage interest on personal residence 10,000
State income taxes 5,000
Real estate taxes 8,000
Questions:
Q1. What is the amount of Allen's AMT adjustments related to the itemized deductions?
Q2. What is Allen's AMT liability for the current year?