Omar acquires used 7-year personal property for $100,000 to use in his business in February 2014.Omar does not elect § 179 expensing,but does take the maximum regular cost recovery deduction.He elects not to take additional first-year depreciation.As a result,Omar will have a positive AMT adjustment in 2014 of what amount?
A)$0
B)$3,580
C)$10,710
D)$14,290
E)None of these

Question

Quizplus · Accepted Answer

For regular income tax purposes,Omar's cost recovery deduction for 2014 is $14,290 ($100,000 × 14.29%).For AMT purposes,Omar's cost recovery deduction for 2014 is $10,710 ($100,000 × 10.71%).Thus,he has a positive AMT adjustment in 2014 of $3,580 ($14,290 - $10,710).

Omar Acquires Used 7-Year Personal Property for $100,000 to Use