Techniques that can be used to minimize the current period tax liability include:
A)Recognizing the interaction between the regular income tax liability and the alternative minimum tax liability.
B)Utilization of special allocations.
C)Favorable treatment of certain fringe benefits.
D)Minimizing double taxation.
E)All of the above.

Question

Quizplus · Accepted Answer

All of the techniques listed can be used to minimize current period tax liability. Recognizing the interaction between regular income tax liability and alternative minimum tax liability can help taxpayers avoid triggering the AMT by making strategic adjustments to their taxable income. Utilization of special allocations such as bonus depreciation or capital loss carryforwards can help offset taxable income. Favorable treatment of certain fringe benefits, such as employer-provided health insurance, can also reduce taxable income. Minimizing double taxation through strategies like investing in tax-exempt securities or contributing to a tax-deferred retirement account can also help lower current period tax liability.

Techniques That Can Be Used to Minimize the Current Period