Drake and Davina are married and file a joint return for 2018 with taxable income of $100,000 and tax preferences and adjustments of $65,000 for AMT purposes. Their regular tax liability is $13,879. What is the amount of their total tax liability?
A) $14,456
B) $42,900
C) $28,335
D) $13,789
A) $14,456
The amount of AMTI is $165,000. Their AMT base $165,000 - $109,400 or $55,600. Their TMT is $55,600 × .26 = $14,456. Their tax liability is the greater of the TMT or regular tax, in this case, $14,456.
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