Question 1

What tax rates apply in calculating the TMT for an individual taxpayer?

Accepted Answer

For an individual taxpayer, in

Question 2

The AMT adjustment for research and experimental expenditures can be avoided if the taxpayer capitalizes the expenditures and amortizes them over a 10-year period for regular tax purposes.

Accepted Answer

A) True 
 B)False

Question 3

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 4

Tad and Audria, who are married filing a joint return, have AMTI of $1,256,000 for 2018.Calculate their AMT exemption.

Accepted Answer

The answer of Tad and Audria, who are married filing...

Question 5

What itemized deductions are allowed for both regular income tax purposes and for AMT purposes?

Accepted Answer

The following itemized deductions are al

Question 6

Several years ago, Sarah purchased a certified historic 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) $40,000 credit, $200,000 basis. 
C) $40,000 credit, $350,000 basis. 
D) $40,000 credit, $160,000 basis. 
A) $20,000 credit, $180,000 basis. 
B) $40,000 credit, $200,000 basis. 
C) $40,000 credit, $350,000 basis. 
D) $40,000 credit, $160,000 basis.

Question 7

During the year, Green, Inc., incurs the following research expenditures:   Green's qualifying research expenditures for the year are:

Accepted Answer

A) $60,000. 
B) $75,000. 
C) $79,500. 
D) $90,000. 
A) $60,000. 
B) $75,000. 
C) $79,500. 
D) $90,000.

Question 8

What is the relationship between taxable income and AMTI?

Accepted Answer

The indirect method, rather than the dir

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements concerning capital gains and losses and the AMT is correct?

Accepted Answer

A) The lower tax rate on net capital gain is not allowed in the calculation of tentative minimum tax. 
B) Net capital losses disallowed for regular tax purposes are deductible in the calculation of AMTI 
C) The lower tax rate on net capital gain applies in calculating both regular income tax and the tentative minimum tax. 
D) Net capital gain is taxed at the maximum 28% AMT rate 
A) The lower tax rate on net capital gain is not allowed in the calculation of tentative minimum tax. 
B) Net capital losses disallowed for regular tax purposes are deductible in the calculation of AMTI 
C) The lower tax rate on net capital gain applies in calculating both regular income tax and the tentative minimum tax. 
D) Net capital gain is taxed at the maximum 28% AMT rate

Question 11

BlueCo incurs $900,000 during the year to construct a facility that will be used exclusively for the care of its employees' pre-school age children during normal working hours.The credit for employer-provided child care available to BlueCo this year is $225,000.

Accepted Answer

A) True 
 B)False

Question 12

In 2018, Liam's filing status is married filing separately.For regular tax purposes, he has three dependents.Liam does not itemize deductions; his regular taxable income is $456,000. What is Liam's 2018 AMT base?

Accepted Answer

A) $0. 
B) $413,300. 
C) $456,000. 
D) $468,000. 
A) $0. 
B) $413,300. 
C) $456,000. 
D) $468,000.

Question 13

Prior to consideration of tax credits, Clarence's regular income tax liability is $200,000 and his tentative minimum tax TMT) is $180,000.Clarence holds nonrefundable business tax credits of $35,000.His tax liability is $165,000.

Accepted Answer

A) True 
 B)False

Question 14

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 15

Waltz, Inc., a U.S.taxpayer, pays foreign taxes of $50,000 on foreign-source general basket income of $90,000.Waltz's worldwide taxable income is $450,000, on which it owes U.S.taxes of $94,500 before FTC.Waltz's FTC is
$50,000.

Accepted Answer

A) True 
 B)False

Question 16

Andrea, will not itemize deductions in calculating her 2018 taxable income.What is the amount of the AMT adjustment in calculating AMTI?

Accepted Answer

In calculating Andrea's 2018 taxable inc

Question 17

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 18

Employers are encouraged by the work opportunity tax credit to hire individuals who have been long-term recipients of family assistance welfare benefits.

Accepted Answer

A) True 
 B)False

Question 19

Because passive losses are not deductible in computing either taxable income or AMTI, no AMT adjustment for passive losses is required.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

In converting regular taxable

What tax rates apply in calculating the TMT for an individual taxpayer?

The AMT adjustment for research and experimental expenditures can be avoided if the taxpayer capitalizes the expenditures and amortizes them over a 10-year period for regular tax purposes.

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.

Tad and Audria, who are married filing a joint return, have AMTI of $1,256,000 for 2018.Calculate their AMT exemption.

What itemized deductions are allowed for both regular income tax purposes and for AMT purposes?

During the year, Green, Inc., incurs the following research expenditures: Green's qualifying research expenditures for the year are:

What is the relationship between taxable income and AMTI?

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

Which of the following statements concerning capital gains and losses and the AMT is correct?

BlueCo incurs $900,000 during the year to construct a facility that will be used exclusively for the care of its employees' pre-school age children during normal working hours.The credit for employer-provided child care available to BlueCo this year is $225,000.

In 2018, Liam's filing status is married filing separately.For regular tax purposes, he has three dependents.Liam does not itemize deductions; his regular taxable income is $456,000. What is Liam's 2018 AMT base?

Prior to consideration of tax credits, Clarence's regular income tax liability is $200,000 and his tentative minimum tax TMT) is $180,000.Clarence holds nonrefundable business tax credits of $35,000.His tax liability is $165,000.

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.

Waltz, Inc., a U.S.taxpayer, pays foreign taxes of $50,000 on foreign-source general basket income of $90,000.Waltz's worldwide taxable income is $450,000, on which it owes U.S.taxes of $94,500 before FTC.Waltz's FTC is $50,000.

Andrea, will not itemize deductions in calculating her 2018 taxable income.What is the amount of the AMT adjustment in calculating AMTI?

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.

Employers are encouraged by the work opportunity tax credit to hire individuals who have been long-term recipients of family assistance welfare benefits.

Because passive losses are not deductible in computing either taxable income or AMTI, no AMT adjustment for passive losses is required.

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

Introduction to Taxation

Working With the Tax Law

Taxes on the Financial Statements

Gross Income

Business Deductions

Losses and Loss Limitations

Property Transactions: Basis, Gain and Loss, and Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Individuals As the Taxpayer

Individuals: Income, Deductions, and Credits

Individuals As Employees and Proprietors

Corporations: Organization, Capital Structure, and Operating Rules

Corporations: Earnings and Profits and Distributions

Partnerships and Limited Liability Entities

S Corporations

Multijurisdictional Taxation

Comparative Forms of Doing Business

Filters

Exam 17: Business Tax Credits and the Alternative Minimum Tax

What tax rates apply in calculating the TMT for an individual taxpayer?

The AMT adjustment for research and experimental expenditures can be avoided if the taxpayer capitalizes the expenditures and amortizes them over a 10-year period for regular tax purposes.

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.

Tad and Audria, who are married filing a joint return, have AMTI of $1,256,000 for 2018.Calculate their AMT exemption.

What itemized deductions are allowed for both regular income tax purposes and for AMT purposes?

During the year, Green, Inc., incurs the following research expenditures: Green's qualifying research expenditures for the year are:

What is the relationship between taxable income and AMTI?

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

Which of the following statements concerning capital gains and losses and the AMT is correct?

BlueCo incurs $900,000 during the year to construct a facility that will be used exclusively for the care of its employees' pre-school age children during normal working hours.The credit for employer-provided child care available to BlueCo this year is $225,000.

In 2018, Liam's filing status is married filing separately.For regular tax purposes, he has three dependents.Liam does not itemize deductions; his regular taxable income is $456,000. What is Liam's 2018 AMT base?

Prior to consideration of tax credits, Clarence's regular income tax liability is $200,000 and his tentative minimum tax TMT) is $180,000.Clarence holds nonrefundable business tax credits of $35,000.His tax liability is $165,000.

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.

Waltz, Inc., a U.S.taxpayer, pays foreign taxes of $50,000 on foreign-source general basket income of $90,000.Waltz's worldwide taxable income is $450,000, on which it owes U.S.taxes of $94,500 before FTC.Waltz's FTC is $50,000.

Andrea, will not itemize deductions in calculating her 2018 taxable income.What is the amount of the AMT adjustment in calculating AMTI?

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.

Employers are encouraged by the work opportunity tax credit to hire individuals who have been long-term recipients of family assistance welfare benefits.

Because passive losses are not deductible in computing either taxable income or AMTI, no AMT adjustment for passive losses is required.

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

Introduction to Taxation

Working With the Tax Law

Taxes on the Financial Statements

Gross Income

Business Deductions

Losses and Loss Limitations

Property Transactions: Basis, Gain and Loss, and Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Individuals As the Taxpayer

Individuals: Income, Deductions, and Credits

Individuals As Employees and Proprietors

Corporations: Organization, Capital Structure, and Operating Rules

Corporations: Earnings and Profits and Distributions

Partnerships and Limited Liability Entities

S Corporations

Multijurisdictional Taxation

Comparative Forms of Doing Business

Filters