Question 1

​Which of the following would not cause an individual taxpayer's AMTI to increase in the current year?

Accepted Answer

A) ​Investing in private-activity municipal bonds. 
B) ​Paying real estate taxes due in January of the next year rather than in the current year. 
C) ​Amortizing circulation expenditures over three years for regular tax purposes. 
D) ​Exercising incentive stock options. 
A) ​Investing in private-activity municipal bonds. 
B) ​Paying real estate taxes due in January of the next year rather than in the current year. 
C) ​Amortizing circulation expenditures over three years for regular tax purposes. 
D) ​Exercising incentive stock options.

Question 2

The AMT exemption for a C corporation is $50,000, reduced by 50% of the amount by which AMTI exceeds $150,000.

Accepted Answer

A) True 
 B)False

Question 3

How can the positive AMT adjustment for research and experimental expenditures be avoided?

Accepted Answer

For regular income tax purposes, researc

Question 4

​ In the current tax year David, a 32-year-old single taxpayer, reported itemized deductions of $24,500, comprised of the following amounts. ​
​
$6,000 of medical expenses (in excess of 10% of AGI)
4,500 of property taxes on his home
2,500 of investment expenses (not limited by investment income)
3,000 of charitable contributions
8,500 of home mortgage interest
​
​
Which of David's itemized deductions could create an AMT preference?

Accepted Answer

A) ​All of the itemized deductions potentially create an AMT preference. 
B) ​The deduction for medical expenses and property taxes potentially create an AMT preference. 
C) ​The deduction for investment expenses and property taxes potentially create an AMT preference. 
D) ​None of the itemized deductions potentially create an AMT preference. 
A) ​All of the itemized deductions potentially create an AMT preference. 
B) ​The deduction for medical expenses and property taxes potentially create an AMT preference. 
C) ​The deduction for investment expenses and property taxes potentially create an AMT preference. 
D) ​None of the itemized deductions potentially create an AMT preference.

Question 5

Tad and Audria, who are married filing a joint return, have AMTI of $256,000 for 2017. Calculate their AMT exemption.

Accepted Answer

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

Question 6

Frederick sells equipment 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:
​
a.Taxable income.
b.AMTI.

Accepted Answer

​
​
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 @#IMG-DLM& The recognized gain using

Question 7

If the taxpayer elects to capitalize and to amortize intangible drilling costs over a 3-year period for regular income tax purposes, there is no adjustment or preference for AMT purposes.

Accepted Answer

A) True 
 B)False

Question 8

​In 2017, 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 2013. ​
​
What is Brenda's total 2017 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 9

In 2017, Blake incurs $270,000 of mining exploration expenditures, and deducts the entire amount for regular income tax purposes. Which of the following statements is correct?

Accepted Answer

A)  For AMT purposes, Blake will have a positive adjustment of $243,000 in 2017. 
B)  Blake will have a negative AMT adjustment of $27,000 in 2021. 
C)  Over a 10-year period, positive and negative adjustments for mining exploration expenditures will net to zero. 
D)  Only a. and c. are correct. 
E)  a., b., and c. are correct. 
A)  For AMT purposes, Blake will have a positive adjustment of $243,000 in 2017. 
B)  Blake will have a negative AMT adjustment of $27,000 in 2021. 
C)  Over a 10-year period, positive and negative adjustments for mining exploration expenditures will net to zero. 
D)  Only a. and c. are correct. 
E)  a., b., and c. are correct.

Question 10

Use the following selected data to calculate Devon's taxable income prior to any personal exemption taken. Devon itemizes deductions.

Accepted Answer

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

Question 11

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 12

In the current tax year, Ben exercised an incentive stock option (ISO), acquiring stock with a fair market value of $190,000 for $170,000. As a result, his AMT basis for the stock is $170,000, his regular income tax basis for the stock is $170,000, and his AMT adjustment is $0 ($170,000 - $170,000).

Accepted Answer

A) True 
 B)False

Question 13

Prior to the effect of the tax credits, Justin's regular income tax liability is $200,000. and his tentative minimum tax is $195,000. Justin reports the following credits. ​
  Calculate Justin's tax liability after credits.

Accepted Answer

A) $190,000 
B) $194,000 
C) $195,000 
D) $200,000 
A) $190,000 
B) $194,000 
C) $195,000 
D) $200,000

Question 14

Under what circumstances are C corporations exempt from the AMT?

Accepted Answer

Small corporations are exempt from the A

Question 15

All of a C corporation's AMT is available for carryover as a minimum tax credit, regardless of whether the adjustments and preferences originate from timing differences or AMT preferences.

Accepted Answer

A) True 
 B)False

Question 16

Keosha acquires used 10-year personal property to use in her business in 2017 and uses MACRS depreciation for regular income tax purposes. As a result, Keosha will incur a positive AMT adjustment in 2017, because AMT depreciation is slower.

Accepted Answer

A) True 
 B)False

Question 17

Beige, Inc., records AMTI of $200,000. Calculate the amount of the AMT exemption if:
a.Beige is a small corporation for AMT purposes.
b.Beige is not a small corporation for AMT purposes.

Accepted Answer

The answer of Beige, Inc., records AMTI of $200,000. Calculate...

Question 18

Which of the following statements is incorrect?

Accepted Answer

A)  AMTI calculated under the direct and indirect methods produces the same amount. 
B)  AMTI calculated under the direct and the indirect methods produces different amounts. 
C)  The tax forms use the direct method to calculate the AMT. 
D)  Only b. and c. are incorrect. 
E)  a., b., and c. are incorrect. 
A)  AMTI calculated under the direct and indirect methods produces the same amount. 
B)  AMTI calculated under the direct and the indirect methods produces different amounts. 
C)  The tax forms use the direct method to calculate the AMT. 
D)  Only b. and c. are incorrect. 
E)  a., b., and c. are incorrect.

Question 19

​In 2017, Brenda has calculated her regular tax liability to be $32,500 and her tentative minimum tax (TMT) to be $36,300. Additionally, Brenda has an adoption expense credit (personal, nonrefundable credit) of $6,200. ​
​What is Brenda's total 2017 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 20

​Which of the following regular taxable income amounts does not potentially create an adjustment or preference in both the individual and the corporate AMT calculations? ​

Accepted Answer

A) ​Depreciation on tangible property placed in service after 1998. 
B) ​The excess of percentage depletion over basis. 
C) ​The deduction for state and local taxes. 
D) ​The use of the completed contract method of accounting for long-term contracts. 
A) ​Depreciation on tangible property placed in service after 1998. 
B) ​The excess of percentage depletion over basis. 
C) ​The deduction for state and local taxes. 
D) ​The use of the completed contract method of accounting for long-term contracts.

Which of the following would not cause an individual taxpayer's AMTI to increase in the current year?

The AMT exemption for a C corporation is $50,000, reduced by 50% of the amount by which AMTI exceeds $150,000.

How can the positive AMT adjustment for research and experimental expenditures be avoided?

Tad and Audria, who are married filing a joint return, have AMTI of $256,000 for 2017. Calculate their AMT exemption.

Frederick sells equipment 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: a.Taxable income. b.AMTI.

If the taxpayer elects to capitalize and to amortize intangible drilling costs over a 3-year period for regular income tax purposes, there is no adjustment or preference for AMT purposes.

In 2017, 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 2013. What is Brenda's total 2017 Federal income tax liability?

In 2017, Blake incurs $270,000 of mining exploration expenditures, and deducts the entire amount for regular income tax purposes. Which of the following statements is correct?

Use the following selected data to calculate Devon's taxable income prior to any personal exemption taken. Devon itemizes deductions.

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.

In the current tax year, Ben exercised an incentive stock option (ISO), acquiring stock with a fair market value of $190,000 for $170,000. As a result, his AMT basis for the stock is $170,000, his regular income tax basis for the stock is $170,000, and his AMT adjustment is $0 ($170,000 - $170,000).

Prior to the effect of the tax credits, Justin's regular income tax liability is $200,000. and his tentative minimum tax is $195,000. Justin reports the following credits. Calculate Justin's tax liability after credits.

Under what circumstances are C corporations exempt from the AMT?

All of a C corporation's AMT is available for carryover as a minimum tax credit, regardless of whether the adjustments and preferences originate from timing differences or AMT preferences.

Keosha acquires used 10-year personal property to use in her business in 2017 and uses MACRS depreciation for regular income tax purposes. As a result, Keosha will incur a positive AMT adjustment in 2017, because AMT depreciation is slower.

Beige, Inc., records AMTI of $200,000. Calculate the amount of the AMT exemption if: a.Beige is a small corporation for AMT purposes. b.Beige is not a small corporation for AMT purposes.

Which of the following statements is incorrect?

In 2017, Brenda has calculated her regular tax liability to be $32,500 and her tentative minimum tax (TMT) to be $36,300. Additionally, Brenda has an adoption expense credit (personal, nonrefundable credit) of $6,200. What is Brenda's total 2017 Federal income tax liability?

Which of the following regular taxable income amounts does not potentially create an adjustment or preference in both the individual and the corporate AMT calculations?

An Introduction to Taxation and Understanding Federal Tax Law

Working With the Tax Law

Tax Formula and Tax Determination; an Overview of Property Transactions

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 Payment Procedures

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters

Exam 12: Alternative Minimum Tax

​Which of the following would not cause an individual taxpayer's AMTI to increase in the current year?

The AMT exemption for a C corporation is $50,000, reduced by 50% of the amount by which AMTI exceeds $150,000.

How can the positive AMT adjustment for research and experimental expenditures be avoided?

Tad and Audria, who are married filing a joint return, have AMTI of $256,000 for 2017. Calculate their AMT exemption.

Frederick sells equipment 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: ​ a.Taxable income. b.AMTI.

If the taxpayer elects to capitalize and to amortize intangible drilling costs over a 3-year period for regular income tax purposes, there is no adjustment or preference for AMT purposes.

​In 2017, 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 2013. ​ ​ What is Brenda's total 2017 Federal income tax liability?

In 2017, Blake incurs $270,000 of mining exploration expenditures, and deducts the entire amount for regular income tax purposes. Which of the following statements is correct?

Use the following selected data to calculate Devon's taxable income prior to any personal exemption taken. Devon itemizes deductions.

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.

Prior to the effect of the tax credits, Justin's regular income tax liability is $200,000. and his tentative minimum tax is $195,000. Justin reports the following credits. ​ Calculate Justin's tax liability after credits.

Under what circumstances are C corporations exempt from the AMT?

All of a C corporation's AMT is available for carryover as a minimum tax credit, regardless of whether the adjustments and preferences originate from timing differences or AMT preferences.

Keosha acquires used 10-year personal property to use in her business in 2017 and uses MACRS depreciation for regular income tax purposes. As a result, Keosha will incur a positive AMT adjustment in 2017, because AMT depreciation is slower.

Beige, Inc., records AMTI of $200,000. Calculate the amount of the AMT exemption if: a.Beige is a small corporation for AMT purposes. b.Beige is not a small corporation for AMT purposes.

Which of the following statements is incorrect?

​In 2017, Brenda has calculated her regular tax liability to be $32,500 and her tentative minimum tax (TMT) to be $36,300. Additionally, Brenda has an adoption expense credit (personal, nonrefundable credit) of $6,200. ​ ​What is Brenda's total 2017 Federal income tax liability?

​Which of the following regular taxable income amounts does not potentially create an adjustment or preference in both the individual and the corporate AMT calculations? ​

An Introduction to Taxation and Understanding Federal Tax Law

Working With the Tax Law

Tax Formula and Tax Determination; an Overview of Property Transactions

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 Payment Procedures

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters

Which of the following would not cause an individual taxpayer's AMTI to increase in the current year?

Frederick sells equipment 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: a.Taxable income. b.AMTI.

In 2017, 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 2013. What is Brenda's total 2017 Federal income tax liability?

Prior to the effect of the tax credits, Justin's regular income tax liability is $200,000. and his tentative minimum tax is $195,000. Justin reports the following credits. Calculate Justin's tax liability after credits.

In 2017, Brenda has calculated her regular tax liability to be $32,500 and her tentative minimum tax (TMT) to be $36,300. Additionally, Brenda has an adoption expense credit (personal, nonrefundable credit) of $6,200. What is Brenda's total 2017 Federal income tax liability?

Which of the following regular taxable income amounts does not potentially create an adjustment or preference in both the individual and the corporate AMT calculations?