Question 1

Are the AMT rates for the individual taxpayer the same as those for a corporate taxpayer?

Accepted Answer

No, the rates are different.Th

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Several years ago, Sarah purchased a structure for $150,000 that was placed in service in 1929.In the current year, she incurred qualifying rehabilitation expenditures of $200,000.The amount of the tax credit for rehabilitation expenditures, and the amount by which the building's basis for cost recovery would increase as a result of the rehabilitation expenditures are the following amounts.

Accepted Answer

A) $20,000 credit, $180,000 basis. 
B) $20,000 credit, $200,000 basis. 
C) $20,000 credit, $350,000 basis. 
D) $40,000 credit, $160,000 basis. 
A) $20,000 credit, $180,000 basis. 
B) $20,000 credit, $200,000 basis. 
C) $20,000 credit, $350,000 basis. 
D) $40,000 credit, $160,000 basis.

Question 4

All foreign taxes qualify for the foreign tax credit.

Accepted Answer

A) True 
 B)False

Question 5

Because current U.S.corporate income tax rates are higher than many foreign corporate income tax rates only infrequently will the credit's, the overall limitation yield a lower foreign tax credit than the amount of foreign taxes actually paid.

Accepted Answer

A) True 
 B)False

Question 6

Steve records a tentative general business credit of $110,000 for the current year.His net regular tax liability before the general business credit is $125,000, and his tentative minimum tax is $100,000.Compute Steve's allowable general business credit for the year.

Accepted Answer

@#IMG-DLM& 
​
*Net income tax = $125,000

Question 7

Vicki owns and operates a news agency (as a sole proprietorship).During 2017, she incurred expenses of $24,000 to increase circulation of newspapers and magazines that her agency distributes.For regular income tax purposes, she elected to expense the $24,000 in 2017.In addition, Vicki incurred $15,000 in circulation expenditures in 2018 and again elected expense treatment.What AMT adjustments will be required in 2017 and 2018 as a result of the circulation expenditures?

Accepted Answer

A) $16,000 positive in 2017, $2,000 positive in 2018. 
B) $16,000 negative in 2017, $2,000 positive in 2018. 
C) $16,000 negative in 2017, $10,000 positive in 2018. 
D) $16,000 positive in 2017, $10,000 positive in 2018. 
E) None of the above. 
A) $16,000 positive in 2017, $2,000 positive in 2018. 
B) $16,000 negative in 2017, $2,000 positive in 2018. 
C) $16,000 negative in 2017, $10,000 positive in 2018. 
D) $16,000 positive in 2017, $10,000 positive in 2018. 
E) None of the above.

Question 8

In May 2013, Cindy incurred qualifying rehabilitation expenditures of $500,000 on a certified historic structure and properly claimed the tax credit for rehabilitation expenditures.In March 2017, she sold the building at a loss.Calculate the rehabilitation expenditures credit recapture that she must report in 2017.

Accepted Answer

​ @#IMG-DLM& 
​
Because the property was

Question 9

Discuss the treatment of unused general business credits.

Accepted Answer

Unused general business credits are init

Question 10

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 11

The AMT exemption for a corporation with $225,000 of AMTI is $18,750.

Accepted Answer

A) True 
 B)False

Question 12

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 13

On February 1, 2017, Omar acquires used 7-year personal property for $100,000 for use in his business.Omar does not elect § 179 expensing, but he does take the maximum regular cost recovery deduction.As a result, Omar incurs a positive AMT adjustment in 2017 of what amount?

Accepted Answer

A) $0 
B) $3,580 
C) $10,710 
D) $14,290 
E) None of the above 
A) $0 
B) $3,580 
C) $10,710 
D) $14,290 
E) None of the above

Question 14

Black Company paid wages of $180,000, of which $40,000 was qualified wages for the work opportunity tax credit under the general rules.Black Company's deduction for wages for the year is:

Accepted Answer

A) $140,000. 
B) $164,000. 
C) $166,000. 
D) $180,000. 
E) None of the above. 
A) $140,000. 
B) $164,000. 
C) $166,000. 
D) $180,000. 
E) None of the above.

Question 15

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 16

AMTI may be defined as regular taxable income after AMT adjustments (other than the NOL and ACE adjustments) and after tax preferences.

Accepted Answer

A) True 
 B)False

Question 17

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 18

Ford Corporation, a calendar year corporation, has alternative minimum taxable income (before any exemption) of $1.28 million for 2017.The company is not a small corporation.If the regular corporate tax is $209,000, Ford's alternative minimum tax for 2017 is:

Accepted Answer

A) $47,000. 
B) $209,000. 
C) $256,000. 
D) $1,280,000. 
E) None of the above. 
A) $47,000. 
B) $209,000. 
C) $256,000. 
D) $1,280,000. 
E) None of the above.

Question 19

Amber is in the process this year of renovating the office building (placed in service in 1976) used by her business.Because of current Federal Regulations that require the structure to be accessible to handicapped individuals, she incurs an additional $11,000 for various features, such as ramps and widened doorways, to make her office building more accessible.The $11,000 incurred will produce a disabled access credit of what amount?

Accepted Answer

A) $0 
B) $5,000 
C) $5,125 
D) $5,500 
A) $0 
B) $5,000 
C) $5,125 
D) $5,500

Question 20

Cardinal Corporation hires two persons certified to be eligible employees for the work opportunity tax credit under the general rules (e.g., food stamp recipients), each of whom is paid $9,000 during the year.As a result of this event, Cardinal Corporation may claim a work opportunity credit of:

Accepted Answer

A) $1,440. 
B) $2,880. 
C) $4,800. 
D) $7,200. 
E) None of the above. 
A) $1,440. 
B) $2,880. 
C) $4,800. 
D) $7,200. 
E) None of the above.

Are the AMT rates for the individual taxpayer the same as those for a corporate taxpayer?

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

All foreign taxes qualify for the foreign tax credit.

Because current U.S.corporate income tax rates are higher than many foreign corporate income tax rates only infrequently will the credit's, the overall limitation yield a lower foreign tax credit than the amount of foreign taxes actually paid.

Steve records a tentative general business credit of $110,000 for the current year.His net regular tax liability before the general business credit is $125,000, and his tentative minimum tax is $100,000.Compute Steve's allowable general business credit for the year.

Discuss the treatment of unused general business credits.

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.

The AMT exemption for a corporation with $225,000 of AMTI is $18,750.

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.

On February 1, 2017, Omar acquires used 7-year personal property for $100,000 for use in his business.Omar does not elect § 179 expensing, but he does take the maximum regular cost recovery deduction.As a result, Omar incurs a positive AMT adjustment in 2017 of what amount?

Black Company paid wages of $180,000, of which $40,000 was qualified wages for the work opportunity tax credit under the general rules.Black Company's deduction for wages for the year is:

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

AMTI may be defined as regular taxable income after AMT adjustments (other than the NOL and ACE adjustments) and after tax preferences.

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.

Ford Corporation, a calendar year corporation, has alternative minimum taxable income (before any exemption) of $1.28 million for 2017.The company is not a small corporation.If the regular corporate tax is $209,000, Ford's alternative minimum tax for 2017 is:

Cardinal Corporation hires two persons certified to be eligible employees for the work opportunity tax credit under the general rules (e.g., food stamp recipients), each of whom is paid $9,000 during the year.As a result of this event, Cardinal Corporation may claim a work opportunity credit of:

Introduction to Taxation

Working With the Tax Law

Taxation on the Financial Statements

Gross Income

Business Deductions

Losses and Loss Limitations

Basis, Gain and Loss, and Nontaxable Exchanges

Capital Gains and Losses

Individuals As the Taxpayers

Income, Deductions and Credits

Individuals As Employees and Proprietors

Organization, Capital Structure, and Operating Rules

Earnings Profits and Distributions

Partnerships and Limited Liability Entities

S Corporations

Multi-Juris-Dictional Taxation

Comparative Forms of Doing Business

Filters

Exam 17: Tax Credits and Corporate Alternative Minimum Tax

Are the AMT rates for the individual taxpayer the same as those for a corporate taxpayer?

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

All foreign taxes qualify for the foreign tax credit.

Because current U.S.corporate income tax rates are higher than many foreign corporate income tax rates only infrequently will the credit's, the overall limitation yield a lower foreign tax credit than the amount of foreign taxes actually paid.

Steve records a tentative general business credit of $110,000 for the current year.His net regular tax liability before the general business credit is $125,000, and his tentative minimum tax is $100,000.Compute Steve's allowable general business credit for the year.

Discuss the treatment of unused general business credits.

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.

The AMT exemption for a corporation with $225,000 of AMTI is $18,750.

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.

On February 1, 2017, Omar acquires used 7-year personal property for $100,000 for use in his business.Omar does not elect § 179 expensing, but he does take the maximum regular cost recovery deduction.As a result, Omar incurs a positive AMT adjustment in 2017 of what amount?

Black Company paid wages of $180,000, of which $40,000 was qualified wages for the work opportunity tax credit under the general rules.Black Company's deduction for wages for the year is:

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

AMTI may be defined as regular taxable income after AMT adjustments (other than the NOL and ACE adjustments) and after tax preferences.

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.

Ford Corporation, a calendar year corporation, has alternative minimum taxable income (before any exemption) of $1.28 million for 2017.The company is not a small corporation.If the regular corporate tax is $209,000, Ford's alternative minimum tax for 2017 is:

Cardinal Corporation hires two persons certified to be eligible employees for the work opportunity tax credit under the general rules (e.g., food stamp recipients), each of whom is paid $9,000 during the year.As a result of this event, Cardinal Corporation may claim a work opportunity credit of:

Introduction to Taxation

Working With the Tax Law

Taxation on the Financial Statements

Gross Income

Business Deductions

Losses and Loss Limitations

Basis, Gain and Loss, and Nontaxable Exchanges

Capital Gains and Losses

Individuals As the Taxpayers

Income, Deductions and Credits

Individuals As Employees and Proprietors

Organization, Capital Structure, and Operating Rules

Earnings Profits and Distributions

Partnerships and Limited Liability Entities

S Corporations

Multi-Juris-Dictional Taxation

Comparative Forms of Doing Business

Filters