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On Dec. 19, the House of Representatives by a vote of 352-64, approved the Senate-passed version of H.R. 3996 (the "Tax Increase Prevention Act of 2007" ), thus clearing the Act for the President's signature. The Act provides for a one-year patch of the AMT for 2007 but does not offset the revenue cost of the measure with revenue raising provisions.

Boosted AMT Exemption Amounts
The alternative minimum tax (AMT) is the excess, if any, of the tentative minimum tax for the year over the regular tax for the year. In arriving at the tentative minimum tax, an individual begins with taxable income, modifies it with various adjustments and preferences, and then subtracts an exemption amount (which phases out at higher income levels). The result is alternative minimum taxable income (AMTI), which is subject to an AMT tax rate of 26% or 28%.

Under pre-Act law, an individual's AMT exemption amounts for 2007 (before the phaseout) were as follows: $45,000 for married individuals filing jointly and surviving spouses; $33,750 for unmarried individuals; and $22,500 for married individuals filing separately.

New law. Under the Act, the AMT exemption amounts (before phaseout) for 2007 for individuals are:

• $66,250 for married individuals filing jointly and surviving spouses (up from $62,550 for 2006);
• $44,350 for unmarried individuals (up from $42,500 for 2006); and

$33,125 for married individuals filing separately (up from $31,275 for 2006). ( Code Sec. 55(d)(1) as amended by Act § 2(a))