Lavender,Inc. ,incurs research and experimental expenditures of $210,000 in 2016.Determine the amount of the AMT adjustment for 2016 and for 2017 if for regular income tax purposes:

a.Lavender fully deducts the research and experimental expenses.
b.Lavender capitalizes the research and experimental expenses and elects to amortize them over a 10-year period.

Question

Lavender,Inc. ,incurs research and experimental expenditures of $210,000 in 2016.Determine the amount of the AMT adjustment for 2016 and for 2017 if for regular income tax purposes:
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a.Lavender fully deducts the research and experimental expenses.
b.Lavender capitalizes the research and experimental expenses and elects to amortize them over a 10-year period.

Quizplus · Accepted Answer

The Answer of Lavender,Inc. ,incurs research and experimental expenditures of $210,000 in 2016.Determine the amount of the AMT adjustment for 2016 and for 2017 if for regular income tax purposes:
​
​
a.Lavender fully deducts the research and experimental expenses.
b.Lavender capitalizes the research and experimental expenses and elects to amortize them over a 10-year period.