Dale Owns and Operates Dale's Emporium as a Sole Proprietorship

Multiple Choice

Dale owns and operates Dale's Emporium as a sole proprietorship. On January 30, 1998, Dale's Emporium acquired a warehouse for $100,000. For regular income tax purposes in 2014, depreciation was deducted under MACRS using a rate of 2.564%. Determine the AMT adjustment for depreciation and indicate whether it is positive or negative.

A) $64 negative adjustment.
B) $64 positive adjustment.
C) No adjustment is required because Dale's Emporium used the Alternative Depreciation System (ADS) to compute depreciation on the property for AMT purposes.
D) No adjustment is required because Dale's Emporium used MACRS to compute the depreciation of the property for regular income tax purposes.
E) None of the above.