How do AMT exemption phase-outs impact capital gains?

By Michael Gray, CPA

May 23, 2005
Date:   Thu, 05 May 2005
From:   Henry

Tell the truth of the AMT impact on dividends and long-term capital gains. The federal AMT tax rate is effectively 22% above $175,000 AMT income due to the phase out of the $58,000 exemption for married persons, $40,250 for singles and $29,000 for married, filing separately.


Date:   Fri, 13 May 2005

Hello Henry,

It’s true the phase out of the AMT exemption can result in a higher effective marginal tax rate (the tax for each additional $1 of long-term capital gains or qualified dividends.) The exemption is reduced by 25¢ for each $1 over $150,000 for married individuals filing a joint return, $112,500 for singles and $75,000 for married persons filing separate returns. The phase out is completed at $382,000 for married joint, $273,500 for singles and $191,000 for married, separate.

Good luck!

Mike Gray

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