Sage Advice Municipal Market Monitor 4Q2006

Over the next few years, an increasing amount of taxpayers will come to the unfortunate realization that they will be responsible for paying the Alternative Minimum Tax (AMT). Unknown to most people, the U.S. tax code contains two methodologies for calculating taxable income; whereby, allowable deductions are subject to a different set of rules. For 2006, it is estimated that over 3.8 million taxpayers will be subject to the AMT. To minimize the AMT effect, Congress has been passing temporary tax code adjustments each year. Without these adjustments, over 30 million taxpayers will be affected by 2010 or approximately one in three taxpayers.