Question 1

After personal property is fully depreciated for both regular income tax purposes and AMT purposes,the positive and negative adjustments that have been made for AMT purposes will net to zero.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following statements concerning capital gains and losses and the AMT is correct?
​

Accepted Answer

A) The lower tax rate on net capital gain is not allowed in the calculation of tentative minimum tax. 
B) Net capital losses disallowed for regular tax purposes are deductible in the calculation of AMTI 
C) The lower tax rate on net capital gain applies in calculating both regular income tax and the tentative minimum tax. 
D) Net capital gain is taxed at the maximum 28% AMT rate

Question 3

Assuming no phaseout,the AMT exemption amount for a married taxpayer filing separately for 2017 is more than the AMT exemption amount for C corporations.

Accepted Answer

A) True 
 B)False

Question 4

Gunter,who is divorced,reports the following items for 2017.Calculate Gunter's 2017 AMTI.
​
  
​

Accepted Answer

The answer of Gunter,who is divorced,reports the following items for...

Question 5

Income from some long-term contracts can be reported using the completed contract method for regular income tax purposes,but the percentage of completion method is required for AMT purposes for all long-term contracts.

Accepted Answer

A) True 
 B)False

Question 6

A taxpayer has a passive activity loss for the current tax year for regular income tax purposes and for AMT purposes.Is it possible that the passive activity losses will be the same amount?

Accepted Answer

The answer of A taxpayer has a passive activity loss...

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

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 2017,he borrowed $50,000 on a home equity loan and used the proceeds to acquire a luxury automobile.During 2017,he paid the following amounts of interest.
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What amount,if any,must Ted recognize as an AMT adjustment in 2017?

Accepted Answer

A) $0 
B) $4,800 
C) $6,200 
D) $11,000

Question 9

The required adjustment for AMT purposes for pollution control facilities placed in service this year is equal to the difference between the amortization deduction allowed for regular income tax purposes and the depreciation deduction computed under ADS.

Accepted Answer

A) True 
 B)False

Question 10

Lavender,Inc.,incurs research and experimental expenditures of $210,000 in 2017.Determine the amount of the AMT adjustment for 2017 and for 2018 if for regular income tax purposes,assuming in independent cases that:
​

Accepted Answer

The answer of Lavender,Inc.,incurs research and experimental expenditures of $210,000...

Question 11

How can an AMT adjustment be avoided by a taxpayer who incurs circulation expenditures in the current tax year?

Accepted Answer

The answer of How can an AMT adjustment be avoided...

Question 12

Business tax credits reduce the AMT and the regular income tax in the same way.

Accepted Answer

A) True 
 B)False

Question 13

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 the amount of...

Question 14

In calculating her 2017 taxable income,Rhonda,who is age 45,claims the following itemized deductions.
​
  
Calculate Rhonda's AMT adjustment for itemized deductions.

Accepted Answer

The answer of In calculating her 2017 taxable income,Rhonda,who is...

Question 15

Evan is a contractor who constructs both commercial and residential buildings.Even though some of the contracts could qualify for the use of the completed contract method,Evan decides to use the percentage of the completion method for all of his contracts.This increases Evan's AMT adjustment associated with long-term contracts for the current year.

Accepted Answer

A) True 
 B)False

Question 16

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 a...

Question 17

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 18

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

The answer of Frederick sells equipment whose adjusted basis for...

Question 19

Identify an AMT adjustment that applies for the individual taxpayer that does not apply for the corporate taxpayer and identify an AMT adjustment that applies for the corporate taxpayer that does not apply for the individual taxpayer.

Accepted Answer

The answer of Identify an AMT adjustment that applies for...

Question 20

In 2017,the amount of the deduction for medical expenses for regular tax purposes may be different than for AMT purposes if the taxpayer is at least age 65.

Accepted Answer

A) True 
 B)False

Exam 15: Alternative Minimum Tax

After personal property is fully depreciated for both regular income tax purposes and AMT purposes,the positive and negative adjustments that have been made for AMT purposes will net to zero.

Which of the following statements concerning capital gains and losses and the AMT is correct?

Assuming no phaseout,the AMT exemption amount for a married taxpayer filing separately for 2017 is more than the AMT exemption amount for C corporations.

Gunter,who is divorced,reports the following items for 2017.Calculate Gunter's 2017 AMTI.

Income from some long-term contracts can be reported using the completed contract method for regular income tax purposes,but the percentage of completion method is required for AMT purposes for all long-term contracts.

A taxpayer has a passive activity loss for the current tax year for regular income tax purposes and for AMT purposes.Is it possible that the passive activity losses will be the same amount?

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

The required adjustment for AMT purposes for pollution control facilities placed in service this year is equal to the difference between the amortization deduction allowed for regular income tax purposes and the depreciation deduction computed under ADS.

Lavender,Inc.,incurs research and experimental expenditures of $210,000 in 2017.Determine the amount of the AMT adjustment for 2017 and for 2018 if for regular income tax purposes,assuming in independent cases that:

How can an AMT adjustment be avoided by a taxpayer who incurs circulation expenditures in the current tax year?

Business tax credits reduce the AMT and the regular income tax in the same way.

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.

In calculating her 2017 taxable income,Rhonda,who is age 45,claims the following itemized deductions. Calculate Rhonda's AMT adjustment for itemized deductions.

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

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.

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.

Identify an AMT adjustment that applies for the individual taxpayer that does not apply for the corporate taxpayer and identify an AMT adjustment that applies for the corporate taxpayer that does not apply for the individual taxpayer.

In 2017,the amount of the deduction for medical expenses for regular tax purposes may be different than for AMT purposes if the taxpayer is at least age 65.

Exam 15: Alternative Minimum Tax

After personal property is fully depreciated for both regular income tax purposes and AMT purposes,the positive and negative adjustments that have been made for AMT purposes will net to zero.

Which of the following statements concerning capital gains and losses and the AMT is correct? ​

Assuming no phaseout,the AMT exemption amount for a married taxpayer filing separately for 2017 is more than the AMT exemption amount for C corporations.

Gunter,who is divorced,reports the following items for 2017.Calculate Gunter's 2017 AMTI. ​ ​

Income from some long-term contracts can be reported using the completed contract method for regular income tax purposes,but the percentage of completion method is required for AMT purposes for all long-term contracts.

A taxpayer has a passive activity loss for the current tax year for regular income tax purposes and for AMT purposes.Is it possible that the passive activity losses will be the same amount?

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

The required adjustment for AMT purposes for pollution control facilities placed in service this year is equal to the difference between the amortization deduction allowed for regular income tax purposes and the depreciation deduction computed under ADS.

Lavender,Inc.,incurs research and experimental expenditures of $210,000 in 2017.Determine the amount of the AMT adjustment for 2017 and for 2018 if for regular income tax purposes,assuming in independent cases that: ​

How can an AMT adjustment be avoided by a taxpayer who incurs circulation expenditures in the current tax year?

Business tax credits reduce the AMT and the regular income tax in the same way.

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.

In calculating her 2017 taxable income,Rhonda,who is age 45,claims the following itemized deductions. ​ Calculate Rhonda's AMT adjustment for itemized deductions.

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

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.

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.

Identify an AMT adjustment that applies for the individual taxpayer that does not apply for the corporate taxpayer and identify an AMT adjustment that applies for the corporate taxpayer that does not apply for the individual taxpayer.

In 2017,the amount of the deduction for medical expenses for regular tax purposes may be different than for AMT purposes if the taxpayer is at least age 65.

Which of the following statements concerning capital gains and losses and the AMT is correct?

Gunter,who is divorced,reports the following items for 2017.Calculate Gunter's 2017 AMTI.

Lavender,Inc.,incurs research and experimental expenditures of $210,000 in 2017.Determine the amount of the AMT adjustment for 2017 and for 2018 if for regular income tax purposes,assuming in independent cases that:

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.

In calculating her 2017 taxable income,Rhonda,who is age 45,claims the following itemized deductions. Calculate Rhonda's AMT adjustment for itemized deductions.

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.