AMT & Capital Gains

[Anarchrist]

But it still makes no sense, philosophically, to use capital gains in calculating the exemption amount.

Which I think is a big part of the original problem. Even if we ignore the bizarre framework of the internal revenue code and claim the code makes sense, the AMT would still be irrational. I don't know that I'll ever get the client to understand why the gains affected the AMT calculation but I'll make one more feeble attempt.

Thanks to everyone who posted - much appreciated.

[OtisMozzetti]

Explanation of AMT for clients

Something that I usually add to my explanation of the AMT for the client is this: The amount of Alt. Min. Tax that you have to pay is a small amount compared with the regular income tax you have to pay. Often that is true.