Reference no: EM132427946
Question - Dan and Maureen file a joint income tax return for 2018. They have two dependent children, ages 7 and 9. Together they earn wages of $830,000. They also receive taxable interest income of $8,000 and interest on City of Los Angeles bonds of $78,000. During 2018, they received a state income tax refund of $3,000 relating to their 2017 state income tax return on which they itemized deductions. Their expenses for the year consist of the following:
Home mortgage interest (on acquisition debt) $19,000
Interest on credit cards $2,000
Real property taxes $8,300
Cash contributions $75,000
State income taxes withheld $48,000
Calculate Dan and Maureen's tentative minimum tax liability assuming an AMT exemption amount of $109,400, before any phase-outs. Show your calculations.
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