In 2016, Job Corporation, a calendar year taxpayer, has AMTI (before adjustment for adjusted current earnings) of $7 million. If Job Corporation's ACE is $16 million, its tentative minimum tax for 2016 is:

Question

Quizplus · Accepted Answer

The tentative minimum tax is calculated by taking the AMTI and adding 75% of the excess of ACE over AMTI. Here, the excess is $16 million - $7 million = $9 million. 75% of $9 million is $6.75 million. Adding this to the AMTI of $7 million gives $13.75 million. The tentative minimum tax is 20% of this amount, which is $2.75 million.

In 2016, Job Corporation, a Calendar Year Taxpayer, Has AMTI