Ashley can reduce her regular income tax liability from $47,000 to $43,500 as the result of the lower tax rate on net capital gain.Ashley's tentative minimum tax is $51,000.

A)Ashley's tax liability is reduced by $3,500 as the result of the lower tax on net capital gain.
B)Ashley's AMT is increased by $3,500 as the result of the lower tax rate on net capital gain.
C)Ashley's tax liability is $43,500.
D)Ashley's tax liability is $47,000.

Question

Ashley can reduce her regular income tax liability from $47,000 to $43,500 as the result of the lower tax rate on net capital gain.Ashley's tentative minimum tax is $51,000.
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A)Ashley's tax liability is reduced by $3,500 as the result of the lower tax on net capital gain.
B)Ashley's AMT is increased by $3,500 as the result of the lower tax rate on net capital gain.
C)Ashley's tax liability is $43,500.
D)Ashley's tax liability is $47,000.

Quizplus · Accepted Answer

The question states that Ashley can reduce her regular income tax liability from $47,000 to $43,500 as a result of the lower tax rate on net capital gain. This means that she is saving $3,500 in taxes. Therefore, choice A is correct. Choices B, C, and D are incorrect because they do not reflect the information provided in the question.

Ashley Can Reduce Her Regular Income Tax Liability from $47,000