On their joint tax return, Sam and Joann had AGI of 150000 and claimed the following itemized deductions:
Interest of 15000 on a 100000 home equity loan to purchase a motor home
Real Estate tax and state income taxes of $18000
Unreimbursed medical expenses of $15000 (prior to AGI limitation)
Miscellaneous itemized deductions of $5000 (prior to AGI limitation)
Based on these deductions, what would be the amount of AMT add-back adjustment in computering alternative minimum taxable income?
a) 21750
b) 38750
c) 35000
d) 23750
Answer: B
Taxes 18000
Home mortgage interest not used to buy, build or improve qualified dwelling) 15000
Medical expenses in excess of 7.5% AGI but not in excess of 10% of AGI 3750
Deductible miscellaneous expenses in excess of 2% of AGI 2000
Total "PANIC TIMME" Add Back 38750
Question:
How come miscellaneous deduction is added back? I thought it was not allowed
Where in the " PANIC TIMME" mnemonic is this Home mortgage interest
If anyone can help me, I would really appreciate it. Thank you