Which of the following statements is correct?
A)If the tentative minimum tax is $100,000 and the regular income tax liability is $120,000, AMT is $20,000.
B)If the tentative minimum tax is $120,000 and the regular income tax liability is $100,000, AMT is $120,000.
C)If the tentative minimum tax is $100,000 and the regular income tax liability is $120,000, AMT is a negative $20,000.
D)If the tentative minimum tax is $120,000 and the regular income tax liability is $100,000, AMT is $20,000.

Question

Quizplus · Accepted Answer

The tentative minimum tax is the minimum amount of tax that must be paid by a taxpayer, calculated using a separate set of rules. If the regular income tax liability is higher than the tentative minimum tax, the taxpayer does not have to pay AMT. In this case, the regular income tax liability is $120,000 and the tentative minimum tax is $120,000, so there is no AMT due. Option D is the only statement where this is correctly explained.

Which of the Following Statements Is Correct