Loraine Manufacturing,Inc.reported the following for the current tax year: What is Loraine Manufacturing's alternative minimum taxable income before any AMT exemption?

Question

Loraine Manufacturing,Inc.reported the following for the current tax year:   What is Loraine Manufacturing's alternative minimum taxable income before any AMT exemption?

Quizplus · Accepted Answer

According to the information provided, the alternative minimum taxable income can be calculated as follows:

Regular taxable income: $98,000
Add-backs for AMT:
Depreciation adjustments: $28,000
Adjustment for tax-exempt interest: $12,000
Adjusted regular taxable income: $98,000 + $28,000 + $12,000 = $138,000
Subtract AMT exemption: $138,000 - $16,000 = $122,000

Therefore, Loraine Manufacturing's alternative minimum taxable income before any AMT exemption is $122,000. The correct choice is C.