By calculating its depreciation using the most accelerated method available,a corporation increases the likelihood that it will be subject to the alternative minimum tax.

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The alternative minimum tax (AMT) is designed to ensure that taxpayers pay a minimum amount of tax, regardless of deductions, exemptions, or other tax benefits. To prevent abuse of accelerated depreciation and other tax avoidance strategies, the AMT disallows certain deductions and requires taxpayers to recalculate their taxable income using a different set of rules. By using the most accelerated method available, a corporation may reduce its current tax liability, but it may also increase its AMT liability, which could offset any potential tax savings.

By Calculating Its Depreciation Using the Most Accelerated Method Available,a