Question 1

If the AMT base is greater than $175,000, the AMT rate for an individual taxpayer is the same as the AMT rate for a C corporation.

Accepted Answer

A) True 
 B)False

Question 2

Use the following selected data to calculate Devon's taxable income.

Accepted Answer

The answer of Use the following selected data to calculate...

Question 3

The exercise of an incentive stock option (ISO) increases both the AMTI and regular taxable income in the year of exercise.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following can produce an AMT preference rather than an AMT adjustment?

Accepted Answer

A) Standard deduction. 
B) Research and experimental expenditures. 
C) Percentage depletion. 
D) Incentive stock options (ISOs). 
E) None of the above. 
A) Standard deduction. 
B) Research and experimental expenditures. 
C) Percentage depletion. 
D) Incentive stock options (ISOs). 
E) None of the above.

Question 5

Kerri, who had AGI of $120,000, itemized her deductions in the current year.She incurred unreimbursed employee business expenses of $8,500.Kerri must make a positive AMT adjustment of $2,400 in computing AMT.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

Most, but not all, AMT adjustments do re

Question 7

C corporations are subject to a positive AMT adjustment equal to 75% of the excess of ACE over AMTI before the ACE adjustment.

Accepted Answer

A) True 
 B)False

Question 8

What effect do deductible gambling losses for regular income tax purposes have in calculating AMTI?

Accepted Answer

The amount allowable in calculating the

Question 9

Interest on a home equity loan may be deductible for AMT purposes.

Accepted Answer

A) True 
 B)False

Question 10

What is the relationship between the regular income tax liability and the tentative AMT?

Accepted Answer

If the tentative AMT exceeds t

Question 11

Frederick sells land and building whose adjusted basis for regular income tax purposes is $345,000 and for AMT purposes is $380,000.The sales proceeds are $850,000.Determine the effect on:

Accepted Answer

@#IMG-DLM& @#IMG-DLM& @#IMG-DLM& Using the direct method to calculate

Question 12

Keosha acquires 10-year personal property to use in her business in 2012 and takes the maximum cost recovery deduction for regular income tax purposes. As a result of this, Keosha will have a positive AMT adjustment in 2012.

Accepted Answer

A) True 
 B)False

Question 13

After personal property is fully depreciated for both regular income tax purposes and AMT purposes, the positive and negative adjustments that have been made for AMT purposes will net to zero.

Accepted Answer

A) True 
 B)False

Question 14

Prior to the effect of tax credits, Wayne's regular income tax liability is $175,000 and his tentative AMT is $150,000.Wayne has nonrefundable business tax credits of $40,000.Wayne's tax liability is $135,000.

Accepted Answer

A) True 
 B)False

Question 15

Assuming no phaseout, the AMT exemption amount for a married taxpayer filing separately for 2012 is less than the AMT exemption amount for C corporations.

Accepted Answer

A) True 
 B)False

Question 16

If a taxpayer deducts the standard deduction in calculating regular taxable income, what effect does this have in calculating AMTI?

Accepted Answer

In converting regula

Question 17

Negative AMT adjustments for the current year caused by timing differences are offset by the positive AMT adjustments for prior tax years also caused by timing differences.

Accepted Answer

A) True 
 B)False

Question 18

Income from some long-term contracts can be reported using the completed contract method for regular income tax purposes, but the percentage of completion method is required for AMT purposes for all long-term contracts.

Accepted Answer

A) True 
 B)False

Question 19

Kay, who is single, had taxable income of $0 in 2012.She has positive timing adjustments of $206,300 and exclusion items of $100,000 for the year.What is the amount of her alternative minimum tax credit for carryover to 2013?

Accepted Answer

A) $80,500. 
B) $68,861. 
C) $20,930. 
D) $13,403. 
E) None of the above. 
A) $80,500. 
B) $68,861. 
C) $20,930. 
D) $13,403. 
E) None of the above.

Question 20

Which of the following statements is correct?

Accepted Answer

A) If the tentative AMT is $10,000 and the regular income tax liability is $12,000, the AMT is $2,000. 
B) If the tentative AMT is $12,000 and the regular income tax liability is $10,000, the AMT is $12,000. 
C) If the tentative AMT is $10,000 and the regular income tax liability is $12,000, the AMT is a negative $2,000. 
D) If the tentative AMT is $12,000, and the regular income tax liability is $10,000, the AMT is $2,000. 
E) None of the above. 
A) If the tentative AMT is $10,000 and the regular income tax liability is $12,000, the AMT is $2,000. 
B) If the tentative AMT is $12,000 and the regular income tax liability is $10,000, the AMT is $12,000. 
C) If the tentative AMT is $10,000 and the regular income tax liability is $12,000, the AMT is a negative $2,000. 
D) If the tentative AMT is $12,000, and the regular income tax liability is $10,000, the AMT is $2,000. 
E) None of the above.

Exam 15: Alternative Minimum Tax

If the AMT base is greater than $175,000, the AMT rate for an individual taxpayer is the same as the AMT rate for a C corporation.

Use the following selected data to calculate Devon's taxable income.

The exercise of an incentive stock option (ISO) increases both the AMTI and regular taxable income in the year of exercise.

Which of the following can produce an AMT preference rather than an AMT adjustment?

Kerri, who had AGI of $120,000, itemized her deductions in the current year.She incurred unreimbursed employee business expenses of $8,500.Kerri must make a positive AMT adjustment of $2,400 in computing AMT.

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

C corporations are subject to a positive AMT adjustment equal to 75% of the excess of ACE over AMTI before the ACE adjustment.

What effect do deductible gambling losses for regular income tax purposes have in calculating AMTI?

Interest on a home equity loan may be deductible for AMT purposes.

What is the relationship between the regular income tax liability and the tentative AMT?

Frederick sells land and building whose adjusted basis for regular income tax purposes is $345,000 and for AMT purposes is $380,000.The sales proceeds are $850,000.Determine the effect on:

Keosha acquires 10-year personal property to use in her business in 2012 and takes the maximum cost recovery deduction for regular income tax purposes. As a result of this, Keosha will have a positive AMT adjustment in 2012.

After personal property is fully depreciated for both regular income tax purposes and AMT purposes, the positive and negative adjustments that have been made for AMT purposes will net to zero.

Prior to the effect of tax credits, Wayne's regular income tax liability is $175,000 and his tentative AMT is $150,000.Wayne has nonrefundable business tax credits of $40,000.Wayne's tax liability is $135,000.

Assuming no phaseout, the AMT exemption amount for a married taxpayer filing separately for 2012 is less than the AMT exemption amount for C corporations.

If a taxpayer deducts the standard deduction in calculating regular taxable income, what effect does this have in calculating AMTI?

Negative AMT adjustments for the current year caused by timing differences are offset by the positive AMT adjustments for prior tax years also caused by timing differences.

Income from some long-term contracts can be reported using the completed contract method for regular income tax purposes, but the percentage of completion method is required for AMT purposes for all long-term contracts.

Kay, who is single, had taxable income of $0 in 2012.She has positive timing adjustments of $206,300 and exclusion items of $100,000 for the year.What is the amount of her alternative minimum tax credit for carryover to 2013?

Which of the following statements is correct?

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Computing the Tax

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

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Tax Credits and Payments

A: Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges-Part 1

Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges-Part 2

Property Transactions: Capital Gains and Losses, 1231, Recapture Provisions

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations

Partnerships

S: Corporations

Exempt Entities

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

Income Taxation of Trusts and Estates

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