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§ 2.18 ALTERNATIVE MINIMUM TAX• Appreciated capital gain property claimed as charitable deduction, butnot tangible personal property 94In addition to the items of tax preference, the alternative minimum tax rulesrequire that certain adjustments be made to selected tax items. Certain adjustmentsare made for:• Depreciation• Mining exploration and development costs• Long-term contracts• Alternative tax net operating loss deduction• Pollution control facilities• Installment method of accounting• Alternative tax energy preference deductionCertain other adjustments are made for noncorporate taxpayers:• Alternative tax itemized deductions• Personal exemptions and standard deduction• Circulation, research, and experimental expenses• Incentive stock options• Passive farm tax shelter losses• Other passive business activity lossesOther adjustments are made for corporate taxpayers:• Adjusted current earnings• Merchant marine capital construction funds• Blue Cross/Blue Shield organizations 95Calculating the alternative minimum tax is a multistep process. The taxpayerfirst adds regular taxable income (RTI) to the amount of tax preference items(TPI) to obtain the alternative minimum taxable income (AMTI). Second, the taxpayerreduces his or her alternative minimum taxable income (AMTI) by anexemption (Exempt). The resulting amount is multiplied by the alternative minimumtax rate (AMT Rate), and then reduced by any available alternative minimumtax foreign tax credit (AMTFTC). The result is a tentative minimum tax (TMT). Thetaxpayer’s regular tax is then subtracted from the TMT to yield a minimum taxthat is imposed in addition to the regular tax.Mathematically, the process for computing the alternative minimum tax is:RTI + TPI = Alternative minimum taxable income((AMTI – Exempt) × AMT rate) – AMTFTC = Tentative minimum taxTMT – Regular tax = Minimum tax94 IRC § 57. The alternative minimum tax rules once included the appreciation element in charitable gifts ofappreciated property as a tax preference item, but that requirement was repealed.95 IRC § 56. 51