AMT on child's return; parents are not living

[Possi]

So, my little girl who gets the pension because both parents died while in the military, does not pay Kiddie tax but now the program is forcing AMT.

I have looked this up, and I do not see that she should pay AMT, but before I override the program, I thought I better check here.

7 years old.

Not adopted, but placed with her aunt.

1099R  income is $20,724 (Military benefit paid similarly as a pension)

interest income is $479

No Sch A. No other income.

Does anyone else agree that AMT is not necessary? I think the program is forcing it because it's a child's return. With no living parents, no kiddie tax, does anyone else know if I can override this to zero AMT?

[jklcpa]

I agree with you. Because both parents are deceased, based on the instructions for line 29 and the chart for "single" filing status, it appears that this child should be allowed the full AMT exemption that should bring the AMTI to zero on this specific return.  Is the program calculating the AMT because it is limiting the exemption because of her age?

Do you have a checkbox or any way to auto-generate a statement that the exemption should not be limited.  If not, I'd be attaching an explanation to send with the return and would be readily available if/when the IRS tries to assess the additional tax.

[Possi]

43 minutes ago, jklcpa said:

I agree with you. Because both parents are deceased, based on the instructions for line 29 and the chart for "single" filing status, it appears that this child should be allowed the full AMT exemption that should bring the AMTI to zero on this specific return.  Is the program calculating the AMT because it is limiting the exemption because of her age?

Do you have a checkbox or any way to auto-generate a statement that the exemption should not be limited.  If not, I'd be attaching an explanation to send with the return and would be readily available if/when the IRS tries to assess the additional tax.

Thank you so much. There wasn't a place to attach an explanation, so I created a scratch pad page where AMT would go. I think if flies with the tax return. If not, I'll be ready for a letter. 2016 and 2017, I'll have to charge accordingly, knowing this won't be the end of this story.

That was a great help, and I have documented the source from the IRS website.