Wolfgang is age 33. His AGI is $125,000. He reports the following itemized deductions for the year.
Medical expenses [$15,000 - (10% × $125,000)] ...................................$ 2,500
State income taxes ........................................................................ 4,200
Charitable contributions .................................................................. 5,000
Home mortgage interest on his personal residence ................................... 6,000
Casualty loss (after $100 and 10% reductions) ....................................... 1,800
Miscellaneous itemized deductions [$3,500 - (2% × $125,000)] .................. 1,000
............................................................................................. $20,500
a. Calculate Wolfgang's itemized deductions for AMT purposes.
b. What is the total amount of the taxpayer's AMT adjustments?