Question 1

How can the positive AMT adjustment for research and experimental expenditures be avoided?

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Question 2

If a taxpayer deducts the standard deduction in calculating regular taxable income, what effect does this have in calculating AMTI?

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Question 3

Durell owns a construction company that builds residential housing. The company is eligible to use the completed contract method for regular income tax purposes. What can Durell do to minimize his AMT?

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Question 4

Why is there no AMT adjustment for charitable contributions?

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Question 5

Discuss the tax year in which an AMT adjustment is first required for an incentive stock option (ISO).

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Question 6

Are the AMT rates for the individual taxpayer the same as those for a corporate taxpayer?

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Question 7

What itemized deductions are allowed for both regular income tax purposes and for AMT purposes?

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Question 8

When qualified residence interest exceeds qualified housing interest, the positive adjustment required in calculating AMT is a timing adjustment. That is, in the future, there will be an offsetting negative adjustment. Comment on the validity of this statement.

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Question 9

How can an AMT adjustment be avoided by a taxpayer who incurs circulation expenditures in the current tax year?

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Question 10

Identify an AMT adjustment that applies for the individual taxpayer that does not apply for the corporate taxpayer and identify an AMT adjustment that applies for the corporate taxpayer that does not apply for the individual taxpayer.

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Question 11

How can interest on a private activity bond issued in 2013 result in both an AMT adjustment that decreases AMTI and an AMT preference that increases AMTI?

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Question 12

Under what circumstances are C corporations exempt from the AMT?

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Question 13

Andrea, who is single, is entitled to a personal exemption deduction in calculating her 2017 taxable income. She has no dependency exemptions. What is the amount of the AMT adjustment in calculating AMTI?

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Question 14

A taxpayer has a passive activity loss for the current tax year for regular income tax purposes and for AMT purposes. Is it possible that the passive activity losses will be the same amount?

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Quiz 12: Alternative Minimum Tax