Keosha acquires 10-year personal property to use in her business in 2012 and takes the maximum cost recovery deduction for regular income tax purposes. As a result of this, Keosha will have a positive AMT adjustment in 2012.

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The cost recovery deduction for regular income tax purposes is typically higher than the deduction allowed for alternative minimum tax (AMT) purposes. Therefore, taking the maximum cost recovery deduction for regular tax purposes can result in a positive AMT adjustment, which reduces the taxpayer's ability to claim certain AMT exemptions and deductions.

Keosha Acquires 10-Year Personal Property to Use in Her Business