In 2011,Sean incurs $90,000 of mining exploration expenditures,and deducts the entire amount for regular income tax purposes.Which of the following statements is correct?

Question

Quizplus · Accepted Answer

For AMT purposes, 90% of the mining exploration expenditures are added back, resulting in a $81,000 positive adjustment in 2011. In subsequent years, a negative adjustment occurs as the expenditures are amortized over 10 years, leading to a $9,000 negative adjustment in 2016. Over the 10-year period, these adjustments net to zero.

In 2011,Sean Incurs $90,000 of Mining Exploration Expenditures,and Deducts the Entire