Valentina, who is single, itemizes deductions and has no dependents. In the current year, she earned $6,000 of municipal bond interest income, and she paid state income taxes of $5,600, mortgage interest of $8,000, and $3,900 of interest on a home equity loan. Her regular taxable income is $95,000.
a. What is Valentina's AMTI if she uses the proceeds of the home equity loan to remodel her existing home?
b. What is Valentina's AMTI if she uses the proceeds of the home equity loan to purchase a new boat to take on vacations?