Assume a corporation is not required to pay AMT in the current year but will pay AMT next year. Also assume the corporation's regular marginal tax rate is 35%. Which tax planning strategy would minimize its after-tax cost of a charitable contribution it is considering paying to a qualified charity?

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By paying the contribution this year, the corporation will reduce its taxable income in the current year, which will result in lower taxes paid at the regular marginal tax rate of 35%. If the corporation waits until next year to pay the contribution, it will still be subject to paying AMT, and the benefit of the charitable deduction will be reduced due to the lower tax rate of 20% under the AMT system. Therefore, paying the contribution this year will minimize the after-tax cost of the charitable contribution.

Assume a Corporation Is Not Required to Pay AMT in the Current