Z Corporation has AMTI of $250,000, which exceeds the AMT exemption phase-out threshold by $100,000. What is Z's tentative minimum tax?
A) $30,000.
B) $47,000.
C) $40,000.
D) $45,000.

Question

Quizplus · Accepted Answer

To determine the tentative minimum tax, we need to calculate 20% of the amount by which AMTI exceeds the exemption phase-out threshold.

$250,000 - $187,800 (exemption phase-out threshold) = $62,200
$62,200 x 0.2 = $12,440

The tentative minimum tax is the greater of the regular tax or the AMT. Since we do not have information on Z corporation's regular tax, we cannot determine if the tentative minimum tax is $12,440 or higher. However, of the provided choices, B is the closest to $12,440 and therefore the best answer.

Z Corporation Has AMTI of $250,000, Which Exceeds the AMT