The tax article from the internet was clear,concise and easy to understand for me.
Can I ask you, do you agree with the tax article from the internet:
"The Alternative Minimum Tax (AMT) credit lets you recoup money you had to pay as an AMT in a prior year. You can only claim this credit in a year when you don't have to pay AMT. You can't use the credit to reduce your AMT liability in the future. However, you can carry forward any unused portion of the credit to future years."
(yes or no)
I think the hardest part of your job is providing clear and concise answers that are communicated in a way that they can be understood by the average person especially so when the issues are very technical in nature. So I hope that you will look at my comments as a learning lesson for both of us on communicating words to each other. I am sure you are a very knowledgeable tax person; however, your answers have not always been clear and easy for me to understand. The reason I have asked the same questions so many times in different ways is because I continued to be confused over words for example:
1. Your last answer that "The AMT that you paid should not be considered prepaid tax, because that insinuates that you are entitled to get it someday. This is not the case."
1. In fact to me it is the case, it is a prepaid tax that I expect to get someday as a minimum tax credit carryover of $92000.00 against future years regular tax.
2. My question - your answer: So does that mean that the minimum tax credit is usable when I have no AMT tax just a regular income tax? No, just when you have an AMT liability.
2. Your answer appears to be just the opposite of what is true. I am able to get the AMT credit when I have a regular tax not when I have an AMT liability.
3. Your answer: The min tax credit will be usable in 2013 and future years to reduce your AMT to your regular tax burden, or floor. I do not know of any 50% use, three or four year use of the min tax credit as a refund, etc.
3. Your answer "reduce your AMT to your regular tax burden, or floor" is confusing. What does it mean? A clearer answer would have been (You can only claim this credit in a year when you don't have to pay AMT. You can't use the credit to reduce your AMT liability in the future).
4. My question - your answer: If I am subject to the AMT tax in future years, are you saying I will not be able to use the minimum tax credit for those years? No. That the credit will indeed be available for AMT application in future years. The problem is that now the min tax credit is only available against AMT, and no refund provision exists.
4. This answers provided confusion because it appears to be stating that the minimum tax credit is only usable in a year when an AMT tax exists that is not true.
5. Your comments: First, the easiest idea to grasp. The minimum tax credit is just that, a tax credit available against AMT. You can use just enough to zero out your AMT addition, since the prior year AMT paid is treated as just that, a prepayment. When the minimum tax adjustments and preferences reverse, the prepayments would theoretically be usable.
5. It gives a reader the impression that the AMT tax credit is only usable against AMT tax liability. When in fact you can't use the credit to reduce your AMT liability in the future.
6. Your answer that: For AMT Credits to apply, you can claim the AMT credit if you are in REGULAR tax, but only to the point of your AMT tax liability. For example, in your case, you have a $77k AMT credit that you are carrying forward. Your REGULAR tax liability is $92k. Your AMT tax liability is $82k. You would be able to use $10k of the AMT Credit carryforward. Your AMT credit cannot reduce your regular tax liability below your AMT tax liability.
6. You provided an excellent example with numbers so I was able to understood what you meant when you used the words AMT tax liability. However, the confusing words in your answer are the words AMT tax liability. If you are subject to a regular tax, you do not have an AMT tax liability. To me an AMT tax liability is something added on top of your regular tax. To me, it would have been easier to understand if in your example you used the words AMT tax liability floor amount since your regular tax exceeded your AMT tax. But since you provided an excellent example with numbers, I understood what you meant when you used the words AMT tax liability.
Thanks for your answer, The refundable credit under Section 53 (e) is gone after 2012: I was not aware of that change.
In conclusion, in your last example I believe I finally understood that you agreed with the tax article above. That is: You can only claim this credit in a year when you don't have to pay AMT. You can't use the credit to reduce your AMT liability in the future.
(Is that a yes or no?)