Reference no: EM131792593

John and Susan file a joint income tax return for 2015. They have two dependent children, students, ages 19 and 20 (hint-no child tax credits). John earns wages of $108,000 (Susan doesn't work outside the home) and they have interest income of $2,000. In 2015, they settle a state tax audit and pay $50,000 in additional back state taxes due to an overly aggressive tax-sheltered investment (if that fact seems a little unrealistic...well, go with it anyway).

Their other expenses for the year include:
Acquisition mortgage interest $13,000
Real estate taxes 2,000
State taxes withheld on John's paycheck 3,500
Cash charitable contributions 4,000

CPA fees for assistance with the state audit 4,500 (hint: these are tax preparation fees)

Calculate John and Susan's 2015:

(A) regular tax and

(B) tentative minimum tax (the "Gross AMT").

(C) how much is the total income tax liability John and Susan must pay?