I own land that was occupied by squatters for part of 2018- until they blew up three of my buildings in a drug lab fire. I'm not in the area and learned of it through the sheriff's department. Once I got a copy of the Police Report I ended up compiling values of the property that was lost and the cost of cleaning up the area. Once I entered that Turbotax told me I'd pay an AMT on the deduction- does this sound right and how is it calculated?
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It's certainly possible if you had a good income and a very large Schedule A deduction.
First, go look at the table "Worksheet To See if You Should Fill in Form 6251". It starts on page 92 in the 2019 1040 Instructions. Look at the instructions for line 1 on page 91.
Fill this worksheet out to see if you will owe AMT (I think TurboTax has already done this). This process may give you a feel for how this works.
As for how the AMT is calculated, start by looking at the section "How Is the AMT Calculated?" on this IRS webpage. While this is not terribly helpfully, it shows the principle that people of certain incomes have certain deductions reduced so that they will pay some minimum tax (hence: "Alternative Minimum Tax").
When you look at form 6251, you will see the actual calculations used by TurboTax.
It's certainly possible if you had a good income and a very large Schedule A deduction.
First, go look at the table "Worksheet To See if You Should Fill in Form 6251". It starts on page 92 in the 2019 1040 Instructions. Look at the instructions for line 1 on page 91.
Fill this worksheet out to see if you will owe AMT (I think TurboTax has already done this). This process may give you a feel for how this works.
As for how the AMT is calculated, start by looking at the section "How Is the AMT Calculated?" on this IRS webpage. While this is not terribly helpfully, it shows the principle that people of certain incomes have certain deductions reduced so that they will pay some minimum tax (hence: "Alternative Minimum Tax").
When you look at form 6251, you will see the actual calculations used by TurboTax.
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