Choice "C" is correct. Both mortgage interest and miscellaneous itemized deductions are deductible for regular (schedule A) tax purposes. However, miscellaneous itemized deductions are "adjustments" and, therefore, are not allowed as deductions for alternative minimum tax (AMT) purposes.
Choice "d" is incorrect. Mortgage interest is allowed as a deduction for AMT purposes.
Choice "a" is incorrect. Miscellaneous itemized deductions are not allowed for AMT purposes
Choice "b" is incorrect. The $2,000 miscellaneous itemized deductions are an add back for AMT purposes.