Alternative Minimum Tax

[rovo]

My questions pertains to how "tax free" munis are treated under the AMT. If I were to buy enough of these issues to generate income well in excess of the AMT threshold would I lose the tax exemption on the interest?

ETA: Assume this is the only source of income.

[❤ mollymouser ❤]

I found an article that may be of some use to you:

www.investinginbonds.com/learnmore.asp?catid=8&subcatid=63




_{DISCLAIMER ~ I make no representations about these website(s) or the advice given. You should check the dates of the articles as well as the information contained within with a tax professional of your choosing.}

[ShoreEA]

As the article molly linked to pointed out, only 'Private Activity' bond interest has to be added back into income for AMT purposes. If you, rovo, or anyone else has sufficient cash to buy THAT MANY munis, then it will not be hard to find a broker who understands this and who will generally avoid making you subject to AMT.
One other little tax trap: If the bond owner receives Social Security, be aware that ALL tax-exempt interest must be added back in to calculate the taxable amount of the Soc Sec.

[rovo]

Thank you for the replys.