Amber, Inc., reports taxable income of $212,000.In addition, Amber records the following information which may affect its AMT. .Depreciation on buildings was $52,000.ADS would have been $41,000.
)The president of Amber exercised stock options on Amber stock.She paid $30,000 for the stock, which had a fair market value at exercise date of $49,000.At the end of the year, the stock was worth $54,000.
)Amber deducted percentage depletion of $65,000.The adjusted basis of the natural resource at the beginning of the year was $39,000.
)Amber contributed CSX stock worth $20,000 to the Red Cross.Amber purchased the stock four months ago for $19,000.
What is Amber's AMTI?
A)$212,000.
B)$233,000.
C)$238,000.
D)$249,000.
E)None of the above

Question

Amber, Inc., reports taxable income of $212,000.In addition, Amber records the following information which may affect its AMT. .Depreciation on buildings was $52,000.ADS would have been $41,000.
)​The president of Amber exercised stock options on Amber stock.She paid $30,000 for the stock, which had a fair market value at exercise date of $49,000.At the end of the year, the stock was worth $54,000.
)Amber deducted percentage depletion of $65,000.The adjusted basis of the natural resource at the beginning of the year was $39,000.
)Amber contributed CSX stock worth $20,000 to the Red Cross.Amber purchased the stock four months ago for $19,000.
What is Amber's AMTI?
A)$212,000.
B)$233,000.
C)$238,000.
D)$249,000.
E)None of the above

Quizplus · Accepted Answer

To calculate AMTI, we need to make adjustments to taxable income. The adjustments are as follows: 
- Add back depreciation on buildings adjusted for Alternative Depreciation System (ADS): $52,000 - $41,000 = $11,000 
- Add back the excess of the fair market value of the stock over the exercise price: $49,000 - $30,000 = $19,000 
- Add back percentage depletion in excess of the adjusted basis of the natural resource: $65,000 - $39,000 = $26,000 
- Subtract charitable contribution of appreciated property: $20,000 
AMTI = $212,000 + $11,000 + $19,000 + $26,000 - $20,000 = $248,000 
Therefore, the answer is D, $249,000 (rounded to the nearest thousand).