Tammy expensed mining exploration and development costs of $100,000 incurred in 2011.She will be required to make negative AMT adjustments for each of the next nine years and a positive AMT adjustment in the current tax year.

Question

Quizplus · Accepted Answer

Mining exploration and development costs are subject to the AMT adjustment rules, and Tammy will be required to make negative adjustments for the next nine years to reduce her AMT liability. Additionally, she will make a positive AMT adjustment in the current tax year to reconcile the timing difference between regular tax and AMT treatment of the expenses.

Tammy Expensed Mining Exploration and Development Costs of $100,000 Incurred