Noncorporate Alternative Minimum Tax (Portfolio 587)

Tax Management Portfolio, Noncorporate Alternative Minimum Tax, No. 587, analyzes the alternative minimum tax (AMT) applicable to taxpayers other than corporations.

The AMT is a separate federal income tax system that runs parallel to the regular federal income tax system. Although the minimum tax provisions have been amended several times since the concept of a minimum tax was first introduced, the underlying purpose of the AMT provisions has always been to ensure that taxpayers with substantial economic income pay a minimum amount of federal income tax.

This Portfolio discusses the general applicability of the noncorporate AMT. The Portfolio analyzes the interaction of the AMT with the regular tax; the computation of AMT liability, including the adjustments (§§56 and 58) and items of tax preference (§57) used in determining the amount of alternative minimum taxable income (AMTI); the use of nonrefundable credits against regular tax; the minimum tax credit; and collateral tax issues that arise under the AMT.