Alternative Minimum Tax Law and Legal Definition
Alternative Minimum Tax (AMT)is a tax on certain "preference items," most of which are tax deductions allowed under the normal income tax calculation. It is a part of Federal Income Tax system. Taxpayers pay either the regular tax or the alternative minimum tax, whichever is greater. The AMT operates in effect as a parallel tax system, with its own definition of taxable income, exemptions, and tax rates. Taxpayers compute tax owed under the "regular" and AMT systems and are liable for whichever is higher. The AMT system has in general a broader definition of taxable income, a larger exemption, and lower tax rates than the regular system.
The AMT was introduced by the Tax Reform Act of 1969 and became operative in 1970. It was intended to target high-income households that had been eligible for so many tax benefits that they owed little or no income tax under the tax code of the time. However, the AMT has evolved significantly in many ways since then, with substantial changes in 1978, 1982, 1986, 1990, and 1993, among others.
Legal Definition list
- Alternative Medicine Practitioner
- Alternative Medicine
- Alternative Measures
- Alternative Means of Dispute Resolution
- Alternative Insurance Market
- Alternative Minimum Tax
- Alternative Mortgage Instruments (ATI)
- Alternative Mortgage Transaction [Banks & Banking]
- Alternative Obligation
- Alternative Originator [Education]
- Alternative Pleading
