CAN CAPITAL LOSSES BE CARRIED BACK FOR THE AMT?
The article presents a case study about alternative minimum tax (AMT). Taxpayers pay an additional tax when their AMT liability exceeds their regular tax liability. When Robert Merlo’s employer, Exodus Company, claimed bankruptcy, he filed for capital loss benefits for regular tax purposes and AMT purposes for the stock he purchased under an incentive stock option plan at a cost much lower than its value. A tax court ruled in favor of the U.S. Internal Revenue Service, stating that Merlo was not eligible for capital loss benefits for the AMT.
