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AMT Reduction Strategies After Tax Reform: Identifying AMT Risks and Planning to Avoid AMT

TCJA Changes to the AMT Regime, Credits and Carryforward Calculations, and Reporting on Form 6251 and 8801

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Thursday, January 10, 2019

Recorded event now available

This course will provide tax advisers with a practical guide to calculating and reporting alternative minimum tax (AMT) for individuals, and planning strategies to minimize the impact of the AMT. The panel will discuss the changes to the AMT regime included in tax reform and detail specific steps to lower the overall multi-year tax cost of AMT liability. The webinar will also offer line-by-line guidance in completing Form 6251.

Description

Somewhat surprisingly, the new tax reform law did not repeal the AMT, but it does offer some provisions to narrow the reach and impact of the AMT on individual taxpayers. The elimination of many itemized deductions, as well as the individual exemption amount, will have the effect of significantly reducing the number of taxpayers subject to AMT. However, for some high income taxpayers, AMT will remain in effect and may present calculation challenges as well as planning opportunities.

The AMT regime creates a separate, parallel calculation of income and deductions; however, under the AMT, certain deductions from ordinary taxable income are deemed as “tax preferences” and must be added back in calculating alternative minimum taxable income (AMTI). Additionally, taxpayers must maintain a schedule of AMT tax credits to apply to future AMT liabilities.

Tax advisers serving high net worth individuals must have a thorough grasp of AMT “risk factors” as well as the calculation regime of add-backs, adjustments and credits. By identifying a taxpayer’s AMT situation, alert advisers can implement end of year planning steps to minimize or avoid any AMT liability.

Listen as our experienced panel provides a thorough and practical guide to calculating AMTI and resulting tax, including Form 6251 reporting and planning opportunities to minimize the impact of the AMT.

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Outline

  1. Structure of AMT and identifying AMT triggers
  2. Impact of tax reform on AMT
  3. Tax preferences, adjustments and exemptions to calculate AMTI
  4. Completing Form 6251
    1. Calculating AMT credit carryforwards
    2. Reporting credit carryforward on Form 8801
  5. Tax planning strategies to reduce overall tax cost impact of AMT
    1. Income timing plans such as multi-year cashouts of ISOs
    2. Whether to prepay certain tax bills not deductible for AMT purposes
    3. Possible acceleration of income into AMT year

Benefits

The panel will delve into these and other AMT-related topics:

  • How tax reform’s elimination of certain deductions and personal exemption amounts narrowed the reach of taxpayers subject to AMT
  • AMT triggers and planning steps (including timing decisions)
  • Current AMT rates, exemptions, adjustments and preferences for individual taxpayers
  • Determining the proper treatment of capital gains, NOLs, AMT carryover and other aspects

Faculty

Speiss, Timothy
Timothy Speiss
Partner-in-Charge, Personal Wealth Advisors Group
EisnerAmper

Mr. Speiss has nearly 30 years of experience with tax planning and related investment, compensation and financial...  |  Read More

Waxman, Evan
Evan Waxman, MST, CPA, PFS
Director
EisnerAmper

Mr. Waxman has nearly 20 years of experience advising clients in the areas of individual and trust income tax and...  |  Read More