Kelly purchased a warehouse for her sole proprietorship on January 5, 2017 for $1,000,000. She claims MACRS depreciation of $25,641 for the year. The depreciation under the Alternative Depreciation System (ADS) is $25,000. What is the amount of Kelly's AMT adjustment for depreciation on the warehouse?

Question

Quizplus · Accepted Answer

The AMT adjustment is the difference between the MACRS depreciation and the ADS depreciation. Here, it is $25,641 (MACRS) - $25,000 (ADS) = $641. Since MACRS is greater, the adjustment is positive.

Kelly Purchased a Warehouse for Her Sole Proprietorship on January