tax preference items

Tax Preference Item

Income or other event that is excluded when calculating one's ordinary tax liability but is included when calculating one's liability for the alternative minimum tax. That is, a tax preference item is an item that would be tax deductible under normal circumstances but is not for purposes of the alternative minimum tax. Examples include depreciation and some interest on municipal bonds.

tax preference items

Certain types of income or deductions that are used to calculate the alternative minimum tax. The most common item related to real estate is the depreciation deduction.

Tax Preference Items

Tax items that may result in the imposition of the alternative minimum tax.