Likely amount for AMT exemption for 2008?

[OtisMozzetti]

Since we have a lot of expert readers of the tea leaves, I ask what is the likely amount of the AMT exemption for 2008?

2008, as it stands:
Under the law that stands now for 2008, the amount is only $33,750 ($45,000 for MFJ or for QW) and $22,500 for MFS.

2007:
Under the law passed almost on Christmas eve last year, the AMT exemption amount for 2007 was $44,350 ($66,250 for MFJ and for QW) and $33,125 for MFS.

2009:
What is likely to happen in 2009?

[Roland Slugg]

Anybody can guess, but ....

Each year for the past several years Congress has passed legislation late in the year increasing the AMT exemptions slightly, lest they revert to the levels in effect several years ago. Last year the law went through VERY late ... around Christmas, as was mentioned. In most other years the legislation was enacted in September or October as I recall.

It's possible that no changes will happen this year, but I'd be surprised. The AMT is extremely unpopular when it affects many middle-class T/Ps in states like NY and CA, so my guess is that the 2008 exemptions will be increased by about 4%~5% above 2007 levels, to around $46,000 (S), $69,000 (MFJ), and $34,500 (MFS).

[Snaggletooth]

Finance

What is truly amazing is the quest for offsetting revenue to finance a repeal or relaxing of the AMT. This year they had the 0% capital gains bracket, my guess is that alone would have offset the proposed reduction of the AMT. In 2010 they have the rescission of the estate tax, assuming they are not going to do something else goofy with this one. But they don't do what makes sense, they just kick the can down the street to another year.

The tax brackets, standard deductions, and exemptions were indexed for inflation in 1981 with ERTA. If they had added the AMT to indexing at that time, we would not be having this discussion.

[bruehaus]

Hr 6275

HR 6275, which has passed the House, has the AMT exemption at $69,950 for MFJ and $46,200 for Single. But it's doubtful that bill will pass the Senate as is.