large AMT tax for selling my rental home

Forum|Forum|3 years ago
April 9, 2023
1 reply
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How can i figure out why selling my rental home will lead to large AMT tax?

I know it's the selling rental home that leads to AMT tax. Because i first entered all my tax data except selling rental home. AMT is still 0 at that time. However, once i enter the last part (selling my rental home, in Asset section), a large AMT tax (10s of thousands $) started to show up. why? how can i find out more info about why this selling rental home part will trigger such a large AMT tax?

PattiF

The sale of your rental home must have resulted in a large capital gain that triggered a large AMT tax.

Please see this TurboTax Help article for more information.

From Utopia Realty:

Gain on the sale of investment property generally is capital gain, although a portion may be treated as ordinary income depending on the accelerated depreciation method was used. Capital gains in and of themselves are not an AMT item, but nonetheless they can result in AMT being paid. This is because the AMT exemption amount is phased out for taxpayers at certain income levels, so this additional income can have the result of reducing the exemption which in turn increases taxable income for purposes of the Alternative Minimum Tax.

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