Page 4 - Tax Act First Look: The Complex New World Of The Qualified Business Deduction Rule

breakpoints are indexed for inflation. The maximum tax rates on net capital gains and dividends used in computing the reg- ular tax are used in computing the ten- tative tax.
The exemption amount for a trust or estate is $24,100. For taxable years beginning in 2017, the exemption amounts are phased out by an amount equal to 25% of the amount by which the individual’s AMTI exceeds $160,900 (MFJ and surviving spouses) or $80,450 (MFS or an estate or trust), indexed for inflation.
the phaseout thresholds are significantly increased to $1,000,000 for married indi- viduals filing a joint return and $500,000 for all other taxpayers (other than estates and trusts). The threshold amounts are indexed for inflation. As a result, fewer individuals will be subject to the individ- ual AMT.
The alternative minimum taxable income (AMTI) represents taxable income adjusted for statutorily prescribed tax preferences and adjustments. Several familiar adjustments include the fact that miscellaneous itemized deductions are not allowed; itemized deductions for state, local, and foreign real property, personal property, sales and income taxes are not allowed; deductions for interest on home equity loans are not allowed; and net operating losses generally cannot reduce the taxpayer’s AMTI by more than 90% of the AMTI.
Where an individual is subject to the AMT in a particular year, the amount of tax exceeding the regular tax liability of the taxpayer is allowed as a credit for any subsequent taxable year to the extent the taxpayer’s regular tax liability exceeds the tentative minimum tax lia- bility for such year.
The corporate AMT is repealed, fol- lowing the House bill. The provisions are effective for taxable years beginning after December 31, 2017.
The exemption amounts for taxable years beginning in 2017 are $84,500 for married couples filing jointly and surviv- ing spouses and $54,300 for individuals.
The individual AMT is retained, adopt- ing the position of the Senate bill, and the conference agreement temporarily increases the exemption amount and the exemption phaseout amounts. However,
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Conference committee agreement.
Present Law: Flowthrough taxation of partnerships and S corporations. Partnerships are not subject to federal income tax. The exception is that a pub- licly traded partnership, whose owner- ship interests are traded on an established securities market or are read-
Taxation of Business Income of Individ- uals, Trusts, and Estates:
Deduction for Qualified Business Income