Keosha acquires 10-year personal property to use in her business in 2011 and takes the maximum cost recovery deduction for regular income tax purposes.As a result of this,Keosha will have a positive AMT adjustment in 2011.

Question

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The maximum cost recovery deduction for regular income tax purposes may not be the same as the amount allowed for AMT purposes. Thus, Keosha will have a positive AMT adjustment in 2011, resulting in a higher tax liability for AMT purposes.

Keosha Acquires 10-Year Personal Property to Use in Her Business