Grumond was incorporated on January 1, 2004, and adopted a calendar year for tax purposes. It had the following gross receipts for its first six taxable years: For which of these years is Grumond exempt from AMT?

Question

Grumond was incorporated on January 1, 2004, and adopted a calendar year for tax purposes. It had the following gross receipts for its first six taxable years:  For which of these years is Grumond exempt from AMT?

Quizplus · Accepted Answer

Grumond is exempt from AMT for the first four years, since its gross receipts for those years are less than $7.5 million. The income threshold for the AMT exemption is $7.5 million for the first four taxable years, and $5 million for all subsequent years. Therefore, the years in which Grumond had gross receipts of $7.5 million or less (2004-2007) are exempt from AMT.

Grumond Was Incorporated on January 1, 2004, and Adopted a Calendar