Question 1

Which of the following statements is correct?

Accepted Answer

A) If the tentative minimum tax is $100,000 and the regular income tax liability is $120,000, AMT is $20,000. 
B) If the tentative minimum tax is $120,000 and the regular income tax liability is $100,000, AMT is $120,000. 
C) If the tentative minimum tax is $100,000 and the regular income tax liability is $120,000, AMT is a negative $20,000. 
D) If the tentative minimum tax is $120,000, and the regular income tax liability is $100,000, AMT is $20,000. 
A) If the tentative minimum tax is $100,000 and the regular income tax liability is $120,000, AMT is $20,000. 
B) If the tentative minimum tax is $120,000 and the regular income tax liability is $100,000, AMT is $120,000. 
C) If the tentative minimum tax is $100,000 and the regular income tax liability is $120,000, AMT is a negative $20,000. 
D) If the tentative minimum tax is $120,000, and the regular income tax liability is $100,000, AMT is $20,000.

Question 2

Explain the purpose of the tax credit for rehabilitation expenditures and describe the general characteristics of its computation.

Accepted Answer

The rehabilitation expenditures credit i

Question 3

Interest on a home equity loan cannot be deducted for AMT purposes.

Accepted Answer

A) True 
 B)False

Question 4

For individual taxpayers, the AMT credit is applicable for the AMT that results from timing differences, but it is not available for the AMT that results from the adjustment for itemized deductions or exclusion preferences.

Accepted Answer

A) True 
 B)False

Question 5

In 2018, Brenda has calculated her regular tax liability to be $32,500 and her tentative minimum tax TMT) to be $36,300.Additionally, Brenda holds an alternative minimum tax credit of $6,200 from 2014.
What is Brenda's total 2018 Federal income tax liability?

Accepted Answer

A) $26,300. 
B) $30,100. 
C) $32,500. 
D) $36,300. 
A) $26,300. 
B) $30,100. 
C) $32,500. 
D) $36,300.

Question 6

Explain the purpose of the disabled access credit and describe the general characteristics of its computation.

Accepted Answer

The disabled access credit is designed t

Question 7

The disabled access credit is computed at the rate of 50% of all access expenditures incurred by the taxpayer during the year.

Accepted Answer

A) True 
 B)False

Question 8

If the regular income tax deduction for medical expenses is $0, under certain circumstances the AMT deduction for medical expenses can be greater than $0.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

The AMT exemption amount can be thought

Question 10

The net capital gain included in an individual taxpayer's AMT base is eligible for the lower tax rate on net capital gain.This favorable alternative rate applies both in calculating the regular income tax and the AMT.

Accepted Answer

A) True 
 B)False

Question 11

Paul incurred circulation expenditures of $180,000 in 2018 and deducted that amount for regular income tax purposes.Paul has a $60,000 negative AMT adjustment for each of 2019, 2020, and for 2021.

Accepted Answer

A) True 
 B)False

Question 12

Prior to the effect of tax credits, Eunice's regular income tax liability is $325,000 and her tentative minimum tax is $312,000.Eunice has general business credits available of $20,000.Calculate Eunice's tax liability after tax credits.

Accepted Answer

A) $0 
B) $305,000 
C) $312,000 
D) $325,000 
A) $0 
B) $305,000 
C) $312,000 
D) $325,000

Question 13

A taxpayer who expenses circulation expenditures in the year incurred for regular income tax purposes will incur a positive AMT adjustment in the following year.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

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

Question 15

Tamara operates a natural gas sole proprietorship that incurred $68,000 of intangible drilling costs IDC) in the current year.Her sole proprietorship's net natural gas income for the year is $72,000. What is the sole proprietorship's current year IDC preference?

Accepted Answer

A) $6,800. 
B) $10,800. 
C) $14,400. 
D) $46,800. 
A) $6,800. 
B) $10,800. 
C) $14,400. 
D) $46,800.

Question 16

Discuss the treatment of unused general business credits.

Accepted Answer

Unused general business credits are init

Question 17

The tax benefits resulting from tax credits and tax deductions are affected by the tax rate bracket of the taxpayer.

Accepted Answer

A) True 
 B)False

Question 18

A taxpayer has a passive activity loss for the current tax year for regular income tax purposes and for AMT purposes.Is it possible that the passive activity losses will be the same amount?

Accepted Answer

The passive activity loss for

Question 19

The incremental research activities credit is 20% of the qualified research expenses that exceed the base amount.

Accepted Answer

A) True 
 B)False

Question 20

Any unused general business credit must be carried back 3 years and then forward for 20 years.

Accepted Answer

A) True 
 B)False

Which of the following statements is correct?

Explain the purpose of the tax credit for rehabilitation expenditures and describe the general characteristics of its computation.

Interest on a home equity loan cannot be deducted for AMT purposes.

For individual taxpayers, the AMT credit is applicable for the AMT that results from timing differences, but it is not available for the AMT that results from the adjustment for itemized deductions or exclusion preferences.

In 2018, Brenda has calculated her regular tax liability to be $32,500 and her tentative minimum tax TMT) to be $36,300.Additionally, Brenda holds an alternative minimum tax credit of $6,200 from 2014. What is Brenda's total 2018 Federal income tax liability?

Explain the purpose of the disabled access credit and describe the general characteristics of its computation.

The disabled access credit is computed at the rate of 50% of all access expenditures incurred by the taxpayer during the year.

If the regular income tax deduction for medical expenses is $0, under certain circumstances the AMT deduction for medical expenses can be greater than $0.

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

The net capital gain included in an individual taxpayer's AMT base is eligible for the lower tax rate on net capital gain.This favorable alternative rate applies both in calculating the regular income tax and the AMT.

Paul incurred circulation expenditures of $180,000 in 2018 and deducted that amount for regular income tax purposes.Paul has a $60,000 negative AMT adjustment for each of 2019, 2020, and for 2021.

Prior to the effect of tax credits, Eunice's regular income tax liability is $325,000 and her tentative minimum tax is $312,000.Eunice has general business credits available of $20,000.Calculate Eunice's tax liability after tax credits.

A taxpayer who expenses circulation expenditures in the year incurred for regular income tax purposes will incur a positive AMT adjustment in the following year.

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

Tamara operates a natural gas sole proprietorship that incurred $68,000 of intangible drilling costs IDC) in the current year.Her sole proprietorship's net natural gas income for the year is $72,000. What is the sole proprietorship's current year IDC preference?

Discuss the treatment of unused general business credits.

The tax benefits resulting from tax credits and tax deductions are affected by the tax rate bracket of the taxpayer.

A taxpayer has a passive activity loss for the current tax year for regular income tax purposes and for AMT purposes.Is it possible that the passive activity losses will be the same amount?

The incremental research activities credit is 20% of the qualified research expenses that exceed the base amount.

Any unused general business credit must be carried back 3 years and then forward for 20 years.

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

Which of the following statements is correct?

Explain the purpose of the tax credit for rehabilitation expenditures and describe the general characteristics of its computation.

Interest on a home equity loan cannot be deducted for AMT purposes.

For individual taxpayers, the AMT credit is applicable for the AMT that results from timing differences, but it is not available for the AMT that results from the adjustment for itemized deductions or exclusion preferences.

In 2018, Brenda has calculated her regular tax liability to be $32,500 and her tentative minimum tax TMT) to be $36,300.Additionally, Brenda holds an alternative minimum tax credit of $6,200 from 2014. What is Brenda's total 2018 Federal income tax liability?

Explain the purpose of the disabled access credit and describe the general characteristics of its computation.

The disabled access credit is computed at the rate of 50% of all access expenditures incurred by the taxpayer during the year.

If the regular income tax deduction for medical expenses is $0, under certain circumstances the AMT deduction for medical expenses can be greater than $0.

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

The net capital gain included in an individual taxpayer's AMT base is eligible for the lower tax rate on net capital gain.This favorable alternative rate applies both in calculating the regular income tax and the AMT.

Paul incurred circulation expenditures of $180,000 in 2018 and deducted that amount for regular income tax purposes.Paul has a $60,000 negative AMT adjustment for each of 2019, 2020, and for 2021.

Prior to the effect of tax credits, Eunice's regular income tax liability is $325,000 and her tentative minimum tax is $312,000.Eunice has general business credits available of $20,000.Calculate Eunice's tax liability after tax credits.

A taxpayer who expenses circulation expenditures in the year incurred for regular income tax purposes will incur a positive AMT adjustment in the following year.

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

Tamara operates a natural gas sole proprietorship that incurred $68,000 of intangible drilling costs IDC) in the current year.Her sole proprietorship's net natural gas income for the year is $72,000. What is the sole proprietorship's current year IDC preference?

Discuss the treatment of unused general business credits.

The tax benefits resulting from tax credits and tax deductions are affected by the tax rate bracket of the taxpayer.

A taxpayer has a passive activity loss for the current tax year for regular income tax purposes and for AMT purposes.Is it possible that the passive activity losses will be the same amount?

The incremental research activities credit is 20% of the qualified research expenses that exceed the base amount.

Any unused general business credit must be carried back 3 years and then forward for 20 years.

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