In 2012, Sean incurs $90,000 of mining exploration expenditures, and deducts the entire amount for regular income tax purposes.Which of the following statements is correct?
A)For AMT purposes, Sean will have a positive adjustment of $81,000 in 2012.
B)Sean will have a negative AMT adjustment of $9,000 in 2017.
C)Over a 10-year period, positive and negative adjustments will net to zero.
D)Only a.and c.are correct.
E)a., b., and c.are correct.

Question

Quizplus · Accepted Answer

For AMT purposes, 90% of the mining exploration expenditures are added back as a positive adjustment in the year incurred, and then a negative adjustment is made over the following years, eventually netting to zero over a 10-year period.

In 2012, Sean Incurs $90,000 of Mining Exploration Expenditures, and Deducts