C is corrent. Certain itemized deductions are not deductible in computing an individual’s AMTI. Specifically, no AMT deduction is allowed for state, local, and foreign income taxes, real and personal property taxes, and miscellaneous itemized deductions subject to the 2% of AGI floor. Here, Buron’s $4,000 of real property taxes and $2,000 of miscellaneous itemized deductions must be added back to his $80,000 of regular taxable income before personal exemption to arrive at Buron’s AMTI before AMT exemption of ($80,000 + $4,000 + $2,000) = $86,000.
A is incorrect because the taxes and miscellaneous deductions must be added back to regular taxable income.
C is incorrect because the taxes and miscellaneous deductions must be added back to regular taxable income.
D is incorrect because the taxes and miscellaneous deductions must be added back to regular taxable income.
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