Question 1

What is the purpose of the AMT exemption amount? What is the maximum amount for each filing status for an individual taxpayer and for a corporate taxpayer?

Accepted Answer

The AMT exemption amount can be thought

Question 2

If a gambling loss itemized deduction is permitted for regular income tax purposes,there is no AMT adjustment associated with the gambling loss.

Accepted Answer

A) True 
 B)False

Question 3

The sale of business property might result in an AMT adjustment.

Accepted Answer

A) True 
 B)False

Question 4

What is the relationship between the regular income tax liability and the TMT?

Accepted Answer

If the TMT exceeds the regular

Question 5

The deduction for charitable contributions in calculating the regular income tax can differ from that in calculating the AMT,because the percentage limitations (20%,30%,and 50%)may be applied to a different base amount.

Accepted Answer

A) True 
 B)False

Question 6

The AMT exemption for a C corporation is $50,000 reduced by 25% of the amount by which AMTI exceeds $150,000.

Accepted Answer

A) True 
 B)False

Question 7

Identify an AMT adjustment that applies for the individual taxpayer that does not apply for the corporate taxpayer and identify an AMT adjustment that applies for the corporate taxpayer that does not apply for the individual taxpayer.

Accepted Answer

Among the AMT adjustments that apply for

Question 8

Jackson sells qualifying small business stock for $125,000 (adjusted basis of $105,000)in 2016 ( The stock was acquired in 2007).In calculating gross income for regular income tax purposes,he excludes all of his realized gain of $20,000.The $20,000 exclusion is a tax preference in calculating Jackson's AMTI.

Accepted Answer

A) True 
 B)False

Question 9

Arlene,who is single,reports taxable income for 2016 of $112,000.Calculate her alternative minimum tax,if any,given the following additional information.
​
AMT adjustments
Positive
$22,000
Negative
(25,000)
Tax preferences
46,000

Accepted Answer

Arlene's AMT is calculated as follows.Ta

Question 10

If Abby's alternative minimum taxable income exceeds her regular taxable income,she will incur an alternative minimum tax.

Accepted Answer

A) True 
 B)False

Question 11

The recognized gain for regular income tax purposes and the recognized gain for AMT purposes on the sale of stock acquired with an incentive stock option (ISO)are always the same,because the adjusted basis is the same.

Accepted Answer

A) True 
 B)False

Question 12

Andrea,who is single,has a personal exemption deduction in calculating her 2016 taxable income.She has no dependency deductions.What is the amount of the AMT adjustment in calculating AMTI?

Accepted Answer

In calculating Andrea's 2016 taxable inc

Question 13

Lilly is single and reports zero taxable income for 2016.She has positive AMT timing adjustments of $600,000 and AMT exclusions of $200,000.
​
a.Calculate Lilly's tentative minimum tax.
b.Calculate Lilly's AMT credit carryover to 2017.

Accepted Answer

​
 a.Taxable income
 $ -0-
 AMT adjustme

Question 14

The required adjustment for AMT purposes for pollution control facilities placed in service this year is equal to the difference between the amortization deduction allowed for regular income tax purposes and the depreciation deduction computed under ADS.

Accepted Answer

A) True 
 B)False

Question 15

Will all AMT adjustments reverse? That is,do they relate to timing differences?

Accepted Answer

Most,but not all,AMT adjustments do rela

Question 16

The phaseout of the AMT exemption amount for a taxpayer filing as a head of household both begins and ends at a higher income level than it does for a single taxpayer.

Accepted Answer

A) True 
 B)False

Question 17

Why is there a need for a second tax system called the alternative minimum tax?

Accepted Answer

The AMT was enacted as a backup to the r

Question 18

Elmer exercises an incentive stock option (ISO)in 2016 for $6,000 (fair market value of the stock on the exercise date is $7,600).If Elmer sells the stock later in 2016 for $8,000,the AMT positive adjustment is $1,600 and the AMT negative adjustment is $2,000.

Accepted Answer

A) True 
 B)False

Question 19

Crimson,Inc. ,provides you with the following information.
Regular corporate tax liability
$ 22,250
AMT adjustments and preferences (excluding ACE adjustment)
80,000
ACE adjustment
11,000
Taxable income
100,000
​
Calculate Crimson's AMT for 2016.

Accepted Answer

Crimson's AMT is calculated as follows.T

Question 20

Use the following selected data to calculate Devon's taxable income prior to any personal exemption taken.Devon does not itemize deductions.
Tax preferences
$ 45,000
Positive AMT adjustments
52,000
Negative AMT adjustments
15,000
AMTI
290,000

Accepted Answer

AMTI
 $290,000
 Plus: Negative

What is the purpose of the AMT exemption amount? What is the maximum amount for each filing status for an individual taxpayer and for a corporate taxpayer?

If a gambling loss itemized deduction is permitted for regular income tax purposes,there is no AMT adjustment associated with the gambling loss.

The sale of business property might result in an AMT adjustment.

What is the relationship between the regular income tax liability and the TMT?

The deduction for charitable contributions in calculating the regular income tax can differ from that in calculating the AMT,because the percentage limitations (20%,30%,and 50%)may be applied to a different base amount.

The AMT exemption for a C corporation is $50,000 reduced by 25% of the amount by which AMTI exceeds $150,000.

Identify an AMT adjustment that applies for the individual taxpayer that does not apply for the corporate taxpayer and identify an AMT adjustment that applies for the corporate taxpayer that does not apply for the individual taxpayer.

Arlene,who is single,reports taxable income for 2016 of $112,000.Calculate her alternative minimum tax,if any,given the following additional information. AMT adjustments Positive $22,000 Negative (25,000) Tax preferences 46,000

If Abby's alternative minimum taxable income exceeds her regular taxable income,she will incur an alternative minimum tax.

The recognized gain for regular income tax purposes and the recognized gain for AMT purposes on the sale of stock acquired with an incentive stock option (ISO)are always the same,because the adjusted basis is the same.

Andrea,who is single,has a personal exemption deduction in calculating her 2016 taxable income.She has no dependency deductions.What is the amount of the AMT adjustment in calculating AMTI?

Lilly is single and reports zero taxable income for 2016.She has positive AMT timing adjustments of $600,000 and AMT exclusions of $200,000. a.Calculate Lilly's tentative minimum tax. b.Calculate Lilly's AMT credit carryover to 2017.

The required adjustment for AMT purposes for pollution control facilities placed in service this year is equal to the difference between the amortization deduction allowed for regular income tax purposes and the depreciation deduction computed under ADS.

Will all AMT adjustments reverse? That is,do they relate to timing differences?

The phaseout of the AMT exemption amount for a taxpayer filing as a head of household both begins and ends at a higher income level than it does for a single taxpayer.

Why is there a need for a second tax system called the alternative minimum tax?

Elmer exercises an incentive stock option (ISO)in 2016 for $6,000 (fair market value of the stock on the exercise date is $7,600).If Elmer sells the stock later in 2016 for $8,000,the AMT positive adjustment is $1,600 and the AMT negative adjustment is $2,000.

Crimson,Inc. ,provides you with the following information. Regular corporate tax liability $ 22,250 AMT adjustments and preferences (excluding ACE adjustment) 80,000 ACE adjustment 11,000 Taxable income 100,000 Calculate Crimson's AMT for 2016.

Use the following selected data to calculate Devon's taxable income prior to any personal exemption taken.Devon does not itemize deductions. Tax preferences $ 45,000 Positive AMT adjustments 52,000 Negative AMT adjustments 15,000 AMTI 290,000

An Introduction to Taxation and Understanding the Federal Law

Working With the Tax Law

Tax Formula and Tax Determination an Overview of Property Transactions

Gross Income Concepts and Inclusions

Gross Income Exclusions

Deductions and Losses in General

Deductions and Losses Certain Business Expenses and Losses

Depreciation Cost Recovery Amortization and Depletion

Deductions Employee and Self Employed Related Expenses

Deduction and Losses Certain Itemized Deductions

Investor Losses

Tax Credits and Payment Procedures

Property Transactions Determination of Gain and Loss and Basic Considerations

Property Transactions Nontaxable Exchanges

Property Transactions Capital Gains and Losses

Property Transactions Section 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters

Exam 12: Alternative Minimum Tax

What is the purpose of the AMT exemption amount? What is the maximum amount for each filing status for an individual taxpayer and for a corporate taxpayer?

If a gambling loss itemized deduction is permitted for regular income tax purposes,there is no AMT adjustment associated with the gambling loss.

The sale of business property might result in an AMT adjustment.

What is the relationship between the regular income tax liability and the TMT?

The deduction for charitable contributions in calculating the regular income tax can differ from that in calculating the AMT,because the percentage limitations (20%,30%,and 50%)may be applied to a different base amount.

The AMT exemption for a C corporation is $50,000 reduced by 25% of the amount by which AMTI exceeds $150,000.

Identify an AMT adjustment that applies for the individual taxpayer that does not apply for the corporate taxpayer and identify an AMT adjustment that applies for the corporate taxpayer that does not apply for the individual taxpayer.

Arlene,who is single,reports taxable income for 2016 of $112,000.Calculate her alternative minimum tax,if any,given the following additional information. ​ AMT adjustments Positive $22,000 Negative (25,000) Tax preferences 46,000

If Abby's alternative minimum taxable income exceeds her regular taxable income,she will incur an alternative minimum tax.

The recognized gain for regular income tax purposes and the recognized gain for AMT purposes on the sale of stock acquired with an incentive stock option (ISO)are always the same,because the adjusted basis is the same.

Andrea,who is single,has a personal exemption deduction in calculating her 2016 taxable income.She has no dependency deductions.What is the amount of the AMT adjustment in calculating AMTI?

Lilly is single and reports zero taxable income for 2016.She has positive AMT timing adjustments of $600,000 and AMT exclusions of $200,000. ​ a.Calculate Lilly's tentative minimum tax. b.Calculate Lilly's AMT credit carryover to 2017.

The required adjustment for AMT purposes for pollution control facilities placed in service this year is equal to the difference between the amortization deduction allowed for regular income tax purposes and the depreciation deduction computed under ADS.

Will all AMT adjustments reverse? That is,do they relate to timing differences?

The phaseout of the AMT exemption amount for a taxpayer filing as a head of household both begins and ends at a higher income level than it does for a single taxpayer.

Why is there a need for a second tax system called the alternative minimum tax?

Elmer exercises an incentive stock option (ISO)in 2016 for $6,000 (fair market value of the stock on the exercise date is $7,600).If Elmer sells the stock later in 2016 for $8,000,the AMT positive adjustment is $1,600 and the AMT negative adjustment is $2,000.

Crimson,Inc. ,provides you with the following information. Regular corporate tax liability $ 22,250 AMT adjustments and preferences (excluding ACE adjustment) 80,000 ACE adjustment 11,000 Taxable income 100,000 ​ Calculate Crimson's AMT for 2016.

Use the following selected data to calculate Devon's taxable income prior to any personal exemption taken.Devon does not itemize deductions. Tax preferences $ 45,000 Positive AMT adjustments 52,000 Negative AMT adjustments 15,000 AMTI 290,000

An Introduction to Taxation and Understanding the Federal Law

Working With the Tax Law

Tax Formula and Tax Determination an Overview of Property Transactions

Gross Income Concepts and Inclusions

Gross Income Exclusions

Deductions and Losses in General

Deductions and Losses Certain Business Expenses and Losses

Depreciation Cost Recovery Amortization and Depletion

Deductions Employee and Self Employed Related Expenses

Deduction and Losses Certain Itemized Deductions

Investor Losses

Tax Credits and Payment Procedures

Property Transactions Determination of Gain and Loss and Basic Considerations

Property Transactions Nontaxable Exchanges

Property Transactions Capital Gains and Losses

Property Transactions Section 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters

Arlene,who is single,reports taxable income for 2016 of $112,000.Calculate her alternative minimum tax,if any,given the following additional information. AMT adjustments Positive $22,000 Negative (25,000) Tax preferences 46,000

Lilly is single and reports zero taxable income for 2016.She has positive AMT timing adjustments of $600,000 and AMT exclusions of $200,000. a.Calculate Lilly's tentative minimum tax. b.Calculate Lilly's AMT credit carryover to 2017.

Crimson,Inc. ,provides you with the following information. Regular corporate tax liability $ 22,250 AMT adjustments and preferences (excluding ACE adjustment) 80,000 ACE adjustment 11,000 Taxable income 100,000 Calculate Crimson's AMT for 2016.