As you know, the alternative minimum tax (AMT) is known as the stealth tax. The AMT steals selected deductions that lawmakers grant you for regular tax purposes by taxing them under the AMT. You probably wonder at the logic of this. We do.
What happens is this: you prepare your regular tax return. Then, like most people, you logically think that’s it. But thanks to big changes made by the Tax Reform Act of 1986, you come face-to-face with a new layer of tax law, the AMT, that defies logic and taxes deductions you properly claimed on your regular tax return.
The ugliness of the Tax Reform Act of 1986 is not limited to the huge expansion of the AMT to your deductions; the 1986 reform also launched an attack on your regular tax law mortgage interest deductions. ... Log in to view full article.