Exam 15: Alternative Minimum Tax

Mauve,Inc. ,has the following for 2013,2014,and 2015 and no prior ACE adjustments. 2013 2014 2015 Pre-adjusted AMTI $12,000 $15,000 $8,000 Adjusted current earnings 10,000 17,000 5,000 ​ What is the ACE adjustment for each of the three years? ​ 2013 2014 2015

Use the following data to calculate Jolene's AMTI. Taxable income $190,000 AMT adjustments Positive 70,000 Negative (14,000) Tax preferences 25,000

Arlene,who is single,has taxable income for 2015 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

Eula owns a mineral property that had a basis of $23,000 at the beginning of the year.Cost depletion is $19,000.The property qualifies for a 15% depletion rate.Gross income from the property was $200,000 and net income before the percentage depletion deduction was $50,000.What is Eula's tax preference for excess depletion?

Use the following selected data to calculate Devon's taxable income. Tax preferences $ 45,000 Positive AMT adjustments 52,000 Negative AMT adjustments 15,000 AMTI 290,000

Omar acquires used 7-year personal property for $100,000 to use in his business in February 2015.Omar does not elect § 179 expensing,but does take the maximum regular cost recovery deduction.He elects not to take additional first-year depreciation.As a result,Omar will have a positive AMT adjustment in 2015 of what amount?

Marvin,the vice president of Lavender,Inc. ,exercises stock options for 100 shares of stock in March 2014.The stock options are incentive stock options (ISOs).Their exercise price is $20 and the fair market value on the date of exercise is $28.The options were granted in March 2010 and all restrictions on the free transferability had lapsed by the exercise date.

Ted,who is single,owns a personal residence in the city.He also owns a condo near the ocean.He uses the condo as a vacation home.In March 2015,he borrowed $50,000 on a home equity loan and used the proceeds to acquire a luxury automobile.During 2015,he paid the following amounts of interest. ​ ∙ on his personal residence $15,500 ∙ on the condo 6,200 ∙ on the home equity loan 4,800 ∙ on credit card obligations 1,700 What amount,if any,must Ted recognize as an AMT adjustment in 2015?

Bianca and David have the following for 2015. Regular income tax before credits $32,000 Tentative minimum tax before credits 45,000 ​ a.Calculate Bianca and David's AMT if they qualify for the adoption expense credit of $11,000. b.Calculate Bianca and David's AMT if they qualify for the adoption expense credit of $13,190.

Celia and Christian,who are married filing jointly,have one dependent and do not itemize deductions.They have taxable income of $92,000 and tax preferences of $53,000 in 2015.What is their AMT base for 2015?

Akeem,who does not itemize,incurred a net operating loss (NOL) of $50,000 in 2014.His deductions in 2014 included AMT tax preference items of $20,000,and he had no AMT adjustments.Assuming the NOL is not carried back,what is Akeem's ATNOLD carryover to 2015?

Gunter,who is divorced,has the following items for 2015. Salary $60,000 Gain on sale of land held nine months (regular income tax basis is $4,000 less than AMT basis) 10,000 Traditional IRA contribution 5,000 Alimony paid 9,000 Itemized deductions: Charitable contributions $3,000 Home mortgage interest on his principal residence 4,000 State income taxes 2,000 9,000 Tax preferences 15,000 ​ Calculate Gunter's AMTI for 2015.

Mitch,who is single and age 66 and has no dependents,had AGI of $100,000 in 2015.His potential itemized deductions were as follows: ​ Medical expenses (before percentage limitation) $15,000 State income taxes 3,000 Real estate taxes 7,000 Mortgage (qualified housing and residence) interest 9,000 Cash contributions to various charities 4,000 Unreimbursed employee expenses (before percentage limitation) 4,300 ​ What is the amount of Mitch's AMT adjustment for itemized deductions for 2015?

In 2015,Glenn had a $108,000 loss on a passive activity.None of the loss is attributable to AMT adjustments or preferences.She has no other passive activities.Which of the following statements is correct?

Vinny's AGI is $250,000.He contributed $200,000 in cash to the Boy Scouts,a public charity.What is Vinny's charitable contribution deduction for AMT purposes?

Wallace owns a construction company that builds both commercial and residential buildings.He contracts to build a residential building for $800,000 for which he is eligible to use the completed contract method of accounting.In the current year for regular income tax purposes,Wallace does not recognize any income on the contract.Under the percentage of completion method,the income recognized under the contract would have been $60,000.Wallace's AMT adjustment is:

Tad and Audria,who are married filing a joint return,have AMTI of $256,000 for 2015.Calculate their AMT exemption.

Caroline and Clint are married,have no dependents,and file a joint return in 2015.Use the following selected data to calculate their Federal income tax liability. ​ AMTI $285,000 Regular income tax liability 42,066 AMT tax preferences 90,000

Robin,who is a head of household and age 42,provides you with the following information from his financial records for 2015.Robert itemizes deductions. Regular income tax liability $ 42,539 AMT positive adjustments 30,000 AMT preferences 20,000 Taxable income 181,000 ​ Calculate his AMT for 2015.

Sand Corporation,a calendar year taxpayer,has alternative minimum taxable income [before adjustment for adjusted current earnings (ACE)] of $900,000 for 2015.If Sand's (ACE) is $975,000,its tentative minimum tax for 2015 is: