Status of AMT for 2007

[Roland Slugg]

Just spent a few minutes attempting to learn the status of a possible extension to (and increase in) the AMT exemptions for the year 2007. It appears that H.R. 3996 is the bill with the best chance of success. HR3996 has been passed by the House and sent to the Senate, where it was placed on the Senate calendar on November 14th. The vote in the House was fairly close ... 216 - 193 ... pretty much along party lines.

HR3996 would (among other things) increase the AMT exemptions for 2007 to $44,350 for single T/Ps and to $66,250 for MFJ. The 2006 exemption amounts were $42,500 and $62,550 respectively.

If the Senate passes the bill sent there by the House, it will then go to the President for signature. However, if the senate changes the House bill and passes its own version, it will then need to go to Conference Committee, and if a compromise version comes out of Committee, the House and Senate will each have to pass that version before the final bill goes to the President. All of these steps will take time, so if an increase in the AMT exemptions does become law, it may not happen until mid to late December, or even January 2008.

[Ray]

More on Status of AMT

Went to a seminar last week and a lot was said about the AMT debacle. If all goes very smoothly then it is possible to have the patch in place by mid December.

The problem then exists how long will does it take the IRS to program and check their computers. It was suggested that the process could take up to ten weeks.

I'm not sure how that delay would be handled but if refunds are going to be delayed until all is worked out it could be until the middle of February or later before any are issued.

It appears with the congressional approval rating hitting about 20% they don't have to worry about pleasing anybody.

Ray

[Golden Rocket]

Index for Inflation

We would not have the problem if the AMT were indexed for inflation in 1982 when Reagan administration indexed the std deduction and other rates. Better yet, the AMT came into being in 1970 (or thereabouts), and should have been indexed then.

I realize how pointless the above observation is. Don't waste time with "shoulda, coulda, woulda, etc." But from a legislative standpoint, it might be more successful to index the stupid thing than to get rid of it. The "blue states" are starting to get backlash. A middle-class home in NJ can pay $8,000 annually in property taxes alone, PLUS high income taxes there and in NY too. The Democratic Northeast is feeling the AMT worse per capita than the rest of us. When Roland said the voting was "along party lines" I'm wondering which party?

Bob W, NYEA, and other Yankee members, what say ye?

[joanmcq]

Yep, and here in CA we get hammered too (AND we have our own AMT to top it off). Prop taxes aren't too high, or at least can't be raised much once you bought your house, but income taxes max out at 9.3% at around $42,000 for a single person & $83,000 for MFJ which ain't much income in most of CA, even with our rapidly tumbling house prices (in Sac, $250,000 is still considered cheap for a single family house). and goes up to 10.3% if you have a mill+ AGI (single or MFJ). I rarely see a Texan w/AMT.

[DaveinTexas]

Texas is a big AMT target

Yep, and here in CA we get hammered too (AND we have our own AMT to top it off). Prop taxes aren't too high, or at least can't be raised much once you bought your house, but income taxes max out at 9.3% at around $42,000 for a single person & $83,000 for MFJ which ain't much income in most of CA, even with our rapidly tumbling house prices (in Sac, $250,000 is still considered cheap for a single family house). and goes up to 10.3% if you have a mill+ AGI (single or MFJ). I rarely see a Texan w/AMT.

ever since the onslaught of these "McMansions". Imagine buying a home, sitting on land that is worth more than the house, bulldozing the house, and then building a huge monstrosity over it.

We see many cases of AMT, especially with more affluent people, or at least people living affluently regardless of income! Take a $500,000 house pretty much anywhere in the DFW area and your property taxes will be close to $16,000. Add to that the sales tax deduction and you are squarely in AMT territory. I regularly see married couples paying over $20,000 in property tax especially in fast growing cities like Collin and Tarrant county. Usually these people are in "outside sales" and have very high un-reimbursed business expenses; they can't get enough of the AMT. They just love it when I tell them that I can add $1 million in business expense and it won't change the outcome.

Anywho, that's my two cents.

[joanmcq]

Well, at least to have a McMansion in TX you've gotta be somewhat weathy (or want everyone to think you are). I've got a couple of community college professors with about $110,000 in income between the two of them and a few thousand in EBE, and they'll be hit with AMT if the fix doesn't come in.

Now here in Sac there is an area called the 'Fabulous Forties' of old stately mansions on tree lined streets in town (its where Regan chose to live when he was gov for example). There, people are tearing down smaller gorgeous expensive homes to build monstrosities, or buying two lots, tearing down both houses and doing the same.

I guess some folk just got too much money...

[PIGLEE]

Does anyone know what the AMT "amount limits" would be set to, if congress does nothing? Or what year they would go back to?

[taxxcpa]

No AMT in Texas

I rarely see a Texan w/AMT.

Neither do I. I have a client (Texan) who makes several million a year and never owes AMT.

[Bees Knees]

Does anyone know what the AMT "amount limits" would be set to, if congress does nothing? Or what year they would go back to?

TTB page 1-4 has the 2007 amounts as they currently stand if Congress does nothing.

[PIGLEE]

Thank You Bees Knees

Thank you. As usual what I need is right under my nose, right where it should be. I usually look at the Tax Book first, but not this time. I am still wondering where I lost 2007.