Which of the following statements is correct?
A)If the tentative AMT is $10,000 and the regular income tax liability is $12,000, the AMT is $2,000.
B)If the tentative AMT is $12,000 and the regular income tax liability is $10,000, the AMT is $12,000.
C)If the tentative AMT is $10,000 and the regular income tax liability is $12,000, the AMT is a negative $2,000.
D)If the tentative AMT is $12,000, and the regular income tax liability is $10,000, the AMT is $2,000.
E)None of the above.

Question

Quizplus · Accepted Answer

The correct way to calculate AMT is to compare the tentative minimum tax to the regular income tax liability, and the AMT is the difference between the two. In choice D, the tentative AMT is $12,000 and the regular income tax liability is $10,000, so the AMT is $2,000. This is the correct way to calculate AMT. Choices A, B, and C have incorrect calculations.

Which of the Following Statements Is Correct