Question 1

Gunter,who is divorced,has the following items for 2014.

Accepted Answer

Gunter's regular income tax taxable inco

Question 2

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 2014,he borrowed $50,000 on a home equity loan and used the proceeds to acquire a luxury automobile.During 2014,he paid the following amounts of interest:   What amount,if any,must Ted recognize as an AMT adjustment in 2014?

Accepted Answer

A) $0 
B) $4,800 
C) $6,200 
D) $11,000 
E) None of these 
A) $0 
B) $4,800 
C) $6,200 
D) $11,000 
E) None of these

Question 3

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

Accepted Answer

For regular income tax purposes,research

Question 4

Omar acquires used 7-year personal property for $100,000 to use in his business in February 2014.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 2014 of what amount?

Accepted Answer

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

Question 5

Why is there no AMT adjustment for charitable contributions?

Accepted Answer

The charitable contribution de

Question 6

Bianca and David have the following for 2014:
Regular income tax before credits $32,000
Tentative AMT 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.

Accepted Answer

a.In addition to the foreign tax credit,

Question 7

Mauve,Inc. ,has the following for 2012,2013,and 2014 and no prior ACE adjustments.   What is the ACE adjustment for each of the three years?

Accepted Answer

Adjusted current earnings exceed unadjus

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

The deduction for personal and dependency exemptions is allowed for regular income tax purposes,but is disallowed for AMT purposes.This results in a positive AMT adjustment.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

For an individual taxpayer,a 2

Question 11

If Jessica exercises an ISO and disposes of the option in the same tax year,are any AMT adjustments required?

Accepted Answer

In this case,no AMT adjustment

Question 12

Ashby,who is single and age 30,provides you with the following information from his financial records for 2014.

Accepted Answer

A) $\$ 0$ 
B) $\$ 17,000$ 
C) $\$ 51,900$ 
D) $\$ 52,800$ 
E) $\text { None of these }$ 
A) $\$ 0$ 
B) $\$ 17,000$ 
C) $\$ 51,900$ 
D) $\$ 52,800$ 
E) $\text { None of these }$

Question 13

Benita expensed mining exploration and development costs of $500,000 incurred in the current tax year.She will be required to make negative AMT adjustments for each of the next ten years and a positive AMT adjustment in the current tax year.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Elmer exercises an incentive stock option (ISO)in 2014 for $6,000 (fair market value of the stock on the exercise date is $7,600).If Elmer sells the stock later in 2014 for $8,000,the AMT positive adjustment is $1,600 and the AMT negative adjustment is $2,000.

Accepted Answer

A) True 
 B)False

Question 17

For regular income tax purposes,Yolanda,who is single,is in the 35% tax bracket.Her AMT base is $220,000.Her tentative AMT is:

Accepted Answer

A) $57,200. 
B) $57,950. 
C) $61,600. 
D) $77,000. 
E) None of these. 
A) $57,200. 
B) $57,950. 
C) $61,600. 
D) $77,000. 
E) None of these.

Question 18

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 19

Will all AMT adjustments reverse? That is,do they relate to timing differences?

Accepted Answer

Most,but not all,AMT adjustments do rela

Question 20

Kay,who is single,had taxable income of $0 in 2014.She has positive timing adjustments of $206,300 and exclusion items of $100,000 for the year.What is the amount of her alternative minimum tax credit for carryover to 2015?

Accepted Answer

A) $80,560 
B) $68,861 
C) $68,288 
D) $12,272 
E) None of these 
A) $80,560 
B) $68,861 
C) $68,288 
D) $12,272 
E) None of these

Gunter,who is divorced,has the following items for 2014.

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

Why is there no AMT adjustment for charitable contributions?

Mauve,Inc. ,has the following for 2012,2013,and 2014 and no prior ACE adjustments. What is the ACE adjustment for each of the three years?

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

The deduction for personal and dependency exemptions is allowed for regular income tax purposes,but is disallowed for AMT purposes.This results in a positive AMT adjustment.

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

If Jessica exercises an ISO and disposes of the option in the same tax year,are any AMT adjustments required?

Ashby,who is single and age 30,provides you with the following information from his financial records for 2014.

Benita expensed mining exploration and development costs of $500,000 incurred in the current tax year.She will be required to make negative AMT adjustments for each of the next ten years and a positive AMT adjustment in the current tax year.

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

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

Elmer exercises an incentive stock option (ISO)in 2014 for $6,000 (fair market value of the stock on the exercise date is $7,600).If Elmer sells the stock later in 2014 for $8,000,the AMT positive adjustment is $1,600 and the AMT negative adjustment is $2,000.

For regular income tax purposes,Yolanda,who is single,is in the 35% tax bracket.Her AMT base is $220,000.Her tentative AMT is:

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.

Will all AMT adjustments reverse? That is,do they relate to timing differences?

Kay,who is single,had taxable income of $0 in 2014.She has positive timing adjustments of $206,300 and exclusion items of $100,000 for the year.What is the amount of her alternative minimum tax credit for carryover to 2015?

An Introduction to Taxation and Understanding the 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

Gunter,who is divorced,has the following items for 2014.

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

Why is there no AMT adjustment for charitable contributions?

Mauve,Inc. ,has the following for 2012,2013,and 2014 and no prior ACE adjustments. What is the ACE adjustment for each of the three years?

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

The deduction for personal and dependency exemptions is allowed for regular income tax purposes,but is disallowed for AMT purposes.This results in a positive AMT adjustment.

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

If Jessica exercises an ISO and disposes of the option in the same tax year,are any AMT adjustments required?

Ashby,who is single and age 30,provides you with the following information from his financial records for 2014.

Benita expensed mining exploration and development costs of $500,000 incurred in the current tax year.She will be required to make negative AMT adjustments for each of the next ten years and a positive AMT adjustment in the current tax year.

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

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

Elmer exercises an incentive stock option (ISO)in 2014 for $6,000 (fair market value of the stock on the exercise date is $7,600).If Elmer sells the stock later in 2014 for $8,000,the AMT positive adjustment is $1,600 and the AMT negative adjustment is $2,000.

For regular income tax purposes,Yolanda,who is single,is in the 35% tax bracket.Her AMT base is $220,000.Her tentative AMT is:

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.

Will all AMT adjustments reverse? That is,do they relate to timing differences?

Kay,who is single,had taxable income of $0 in 2014.She has positive timing adjustments of $206,300 and exclusion items of $100,000 for the year.What is the amount of her alternative minimum tax credit for carryover to 2015?

An Introduction to Taxation and Understanding the 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