Mountaineer, Inc. has the following results: $$\begin{array} { | l | r | }
\hline \text { Regular corporate tax liability } & \$ 400,000 \
\hline \text { Taxable income } & 2,000,000 \
\hline \text { Preferences } & 500,000 \
\hline \text { Adjustments } & ( 200,000 \
\hline
\end{array}$$ What is the amount of the alternative minimum tax?

Question

Mountaineer, Inc. has the following results: $$\begin{array} { | l | r | } 
\hline \text { Regular corporate tax liability } & \$ 400,000 \
\hline \text { Taxable income } & 2,000,000 \
\hline \text { Preferences } & 500,000 \
\hline \text { Adjustments } & ( 200,000 \
\hline
\end{array}$$ What is the amount of the alternative minimum tax?

Quizplus · Accepted Answer

The alternative minimum tax (AMT) is calculated as the excess of the tentative minimum tax over the regular tax liability. The tentative minimum tax is calculated by applying a 20% tax rate to the alternative minimum taxable income (AMTI). The AMTI is calculated by adding preferences to the taxable income and making certain adjustments.In this case, the AMTI is $2,500,000 ($2,000,000 + $500,000). The tentative minimum tax is $500,000 ($2,500,000 x 20%). The AMT is $100,000 ($500,000 - $400,000).

Mountaineer, Inc What Is the Amount of the Alternative Minimum Tax? A)

Mountaineer, Inc What Is the Amount of the Alternative Minimum Tax?
A)