Question 1

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) $57,844. 
C) $61,600. 
D) $77,650. 
E) None of the above. 
A) $57,200. 
B) $57,844. 
C) $61,600. 
D) $77,650. 
E) None of the above.

Question 2

If the AMT base is greater than $187,800,the AMT rate for an individual taxpayer is the same as the AMT rate for a C corporation.

Accepted Answer

A) True 
 B)False

Question 3

Vicki owns and operates a news agency (as a sole proprietorship).During 2017,she incurred expenses of $24,000 to increase circulation of newspapers and magazines that her agency distributes.For regular income tax purposes,she elected to expense the $24,000 in 2017.In addition,Vicki incurred $15,000 in circulation expenditures in 2018 and again elected expense treatment.What AMT adjustments will be required in 2017 and 2018 as a result of the circulation expenditures?

Accepted Answer

A) $16,000 positive in 2017, $2,000 positive in 2018. 
B) $16,000 negative in 2017, $2,000 positive in 2018. 
C) $16,000 negative in 2017, $10,000 positive in 2018. 
D) $16,000 positive in 2017, $10,000 positive in 2018. 
E) None of the above. 
A) $16,000 positive in 2017, $2,000 positive in 2018. 
B) $16,000 negative in 2017, $2,000 positive in 2018. 
C) $16,000 negative in 2017, $10,000 positive in 2018. 
D) $16,000 positive in 2017, $10,000 positive in 2018. 
E) None of the above.

Question 4

​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 5

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 6

Which of the following amounts generally produce positive AMT adjustments?

Accepted Answer

A) Real property taxes deduction. 
B) Personal exemption deduction. 
C) Charitable contribution deduction. 
D) Only a.and b.are correct. 
E) a.,b.,and c.are correct. 
A) Real property taxes deduction. 
B) Personal exemption deduction. 
C) Charitable contribution deduction. 
D) Only a.and b.are correct. 
E) a.,b.,and c.are correct.

Question 7

Certain adjustments apply in calculating the corporate AMT that do not apply in calculating the noncorporate AMT and certain adjustments apply in calculating the noncorporate AMT that do not apply in calculating the corporate AMT.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

The AMT exemption amount can be thought

Question 9

Mauve,Inc.,records the following gross receipts in 2015,2016,and 2017.
​
 
What is Mauve,Inc.'s TMT in each of these three years?
​
2015 2016 2017

Accepted Answer

A) $0 $0 $0 
B) $0 $0 $1,160,000 
C) $0 $1,740,000 $1,160,000 
D) $980,000 $1,740,000 $1,160,000 
E) $0 $1,740,000 $0 
A) $0 $0 $0 
B) $0 $0 $1,160,000 
C) $0 $1,740,000 $1,160,000 
D) $980,000 $1,740,000 $1,160,000 
E) $0 $1,740,000 $0

Question 10

Jackson sells qualifying small business stock for $125,000 (adjusted basis of $105,000) in 2017 (the stock was acquired in 2011).In calculating gross income for regular income tax purposes,he excludes all of his realized gain of $20,000.The $20,000 exclusion is a preference in calculating Jackson's AMTI.

Accepted Answer

A) True 
 B)False

Question 11

​ 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 12

Elmer exercises an incentive stock option (ISO) in March for $6,000 (fair market value of the stock on the exercise date is $7,600).If Elmer sells the stock in November of the same tax year for $8,000,he reports a $1,600 AMT adjustment for the year.

Accepted Answer

A) True 
 B)False

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:

If the AMT base is greater than $187,800,the AMT rate for an individual taxpayer is the same as the AMT rate for a C corporation.

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

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.

Which of the following amounts generally produce positive AMT adjustments?

Certain adjustments apply in calculating the corporate AMT that do not apply in calculating the noncorporate AMT and certain adjustments apply in calculating the noncorporate AMT that do not apply in calculating the corporate AMT.

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

Mauve,Inc.,records the following gross receipts in 2015,2016,and 2017. What is Mauve,Inc.'s TMT in each of these three years? 2015 2016 2017

Elmer exercises an incentive stock option (ISO) in March for $6,000 (fair market value of the stock on the exercise date is $7,600).If Elmer sells the stock in November of the same tax year for $8,000,he reports a $1,600 AMT adjustment for the year.

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Computing the Tax

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 Payments

Property Transactions: Determination of Gain or Loss, basis Considerations, and Nontaxable Exchanges

Property Transactions, capital Gains and Losses, sec1231, and Recapture Provisions

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Corporations: Distributions in Complete Liquidation and an Overview of Reorganization

Partnerships

S Corporations

Exempt Entities

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Income Taxation of Trusts and Estates

Filters

Exam 15: Alternative Minimum Tax

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:

If the AMT base is greater than $187,800,the AMT rate for an individual taxpayer is the same as the AMT rate for a C corporation.

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

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.

Which of the following amounts generally produce positive AMT adjustments?

Certain adjustments apply in calculating the corporate AMT that do not apply in calculating the noncorporate AMT and certain adjustments apply in calculating the noncorporate AMT that do not apply in calculating the corporate AMT.

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

Mauve,Inc.,records the following gross receipts in 2015,2016,and 2017. ​ What is Mauve,Inc.'s TMT in each of these three years? ​ 2015 2016 2017

Elmer exercises an incentive stock option (ISO) in March for $6,000 (fair market value of the stock on the exercise date is $7,600).If Elmer sells the stock in November of the same tax year for $8,000,he reports a $1,600 AMT adjustment for the year.

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Computing the Tax

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 Payments

Property Transactions: Determination of Gain or Loss, basis Considerations, and Nontaxable Exchanges

Property Transactions, capital Gains and Losses, sec1231, and Recapture Provisions

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Corporations: Distributions in Complete Liquidation and an Overview of Reorganization

Partnerships

S Corporations

Exempt Entities

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Income Taxation of Trusts and Estates

Filters

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

Mauve,Inc.,records the following gross receipts in 2015,2016,and 2017. What is Mauve,Inc.'s TMT in each of these three years? 2015 2016 2017