Ravi Corporation,a calendar year taxpayer,has AMTI (before adjustment for adjusted current earnings)of $6 million for 2012.If Ravi Corporation's ACE is $15 million,its tentative minimum tax for 2012 is:

Question

Quizplus · Accepted Answer

The tentative minimum tax is calculated as 20% of the excess of AMTI over the ACE.

Excess AMTI = $6 million - $15 million = -$9 million (since the ACE is higher than the AMTI)

Tentative minimum tax = 20% * (-$9 million) = -$1.8 million (a negative amount)

However, the tentative minimum tax cannot be less than zero, so the amount is adjusted to zero.

Therefore, the tentative minimum tax for Ravi Corporation for 2012 is $0.

Note: This question is testing the concept of the tentative minimum tax and how it is calculated. It's important to recognize that if the ACE is higher than the AMTI, the tentative minimum tax will be zero.

Ravi Corporation,a Calendar Year Taxpayer,has AMTI (Before Adjustment for Adjusted