Ashly is able to reduce her regular income tax liability from $47,000 to $43,500 as the result of the alternative tax on net capital gain.Ashly's tentative AMT is $51,000.
A)Ashly's tax liability is reduced by $3,500 as the result of the alternative tax calculation on net capital gain.
B)Ashly's AMT is increased by $3,500 as the result of the alternative tax calculation on net capital gain.
C)Ashly's tax liability is $43,500.
D)Ashly's tax liability is $47,000.
E)None of these.

Question

Quizplus · Accepted Answer

The alternative tax on net capital gain applies in calculating both Ashly's regular income tax liability and her tentative AMT.

Ashly Is Able to Reduce Her Regular Income Tax Liability