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Politics : Politics for Pros- moderated

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To: LindyBill who wrote (92600)	12/28/2004 2:32:53 PM
From: jrhana	of 793829

you get the absurd scenario where a victorious plaintiff owes the IRS more -- sometimes significantly more -- in taxes than s/he was awarded in damages. That's mostly because of the silly Alternative Minimum Tax,> I understand they are planning on eliminating the AMT. I hope so. Another absurd example of the AMT is the treatment of capital gains and losses. You have to declare capital gains but can not deduct capital losses. So to use an extreme example: suppose you have one million in capital gains and nine hundred thousand in capital loses. This gives a total of one hundred thousand in gains. But incredibly (to me at least), you will be taxed at about 29% of the million of gains or $290,000. So you owe $290,000 in taxes on a $100,000 gain. To make it worse you have declare the capital losses on your regular income tax statement. This is because you are required to make two parallel tax calculations-the regular and the AMT. You pay of course whichever is higher. So you use up but do not benefit from the capital losses. They can not now ever be used to offset future gains.

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