For its current tax year, Volcano, Inc. reported the following: $$\begin{array} { l r }
\text { Regular taxable income } & \$ 400,000 \
\text { Regular tax liability } & 136,000 \
\text { AMTI in excess of exemption } & 812,000
\end{array}$$ Compute Volcano's alternative minimum tax.

Question

For its current tax year, Volcano, Inc. reported the following: $$\begin{array} { l r } 
\text { Regular taxable income } & \$ 400,000 \
\text { Regular tax liability } & 136,000 \
\text { AMTI in excess of exemption } & 812,000
\end{array}$$ Compute Volcano's alternative minimum tax.

Quizplus · Accepted Answer

The alternative minimum tax (AMT) is calculated as 20% of the AMTI in excess of the exemption. Thus, AMT = 20% of $812,000 = $162,400. The AMT is the excess of this amount over the regular tax liability, which is $162,400 - $136,000 = $26,400.

For Its Current Tax Year, Volcano, Inc Compute Volcano's Alternative Minimum Tax