Finally, the alternative minimum tax nails interest on some revenue bonds.
R. Austin Chapman, retired chief executive of Northland Co., is fighting a bill for $108,000 in Minnesota state alternative minimum tax, plus interest.
Congress lets you deduct mortgage interest and property taxes on two personal residences (unless you come under the alternative minimum tax, in which case only mortgage interest can be deducted).
Eliminate the alternative minimum tax, itemized deductions and taxes on interest, capital gains and dividends.
BUSINESS DAY The Wealth Matters column on Saturday, about calculating estimated income taxes, misstated the deduction eligibility of mortgage interest under the alternative minimum tax.
He has proposed a tax cut of more than $4 trillion over 10 years, an across-the-board 20 percent reduction in individual income tax rates and the elimination of the estate tax, the alternative minimum tax and taxes on capital gains, dividends and interest for those earning less than $200,000.
The budget that President Obama unveiled this week included some hot-button tax measures aimed at some of these inequities: capping deductions and raising taxes on people earning more than $1 million (the so-called Buffett Rule), scrapping the alternative minimum tax and raising the tax on dividend income and carried interest.
Worse, home equity loan interest is not allowed in the alternative minimum tax.
Also, note that you can deduct mortgage interest, under both the regular and alternative minimum tax, but not fees, if paid separately.
But this interest deduction isn't allowed in the alternative minimum tax.
