Question 1

Calico,Inc. ,has AMTI of $235,000.Calculate the amount of the AMT exemption if:

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Question 2

Why is there a need for a second tax system called the alternative minimum tax?

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Question 3

In calculating her taxable income,Rhonda deducts the following itemized deductions.
  Calculate Rhonda's AMT adjustment for itemized deductions.

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Question 4

Use the following data to calculate Melba's AMTI.

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Question 5

Which of the following statements is correct?

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...

Question 6

Kay,who is single,had taxable income of $0 in 2010.She has positive timing adjustments of $200,000 and exclusion items of $100,000 for the year.What is the amount of her alternative minimum tax credit for carryover to 2011?

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Question 7

Green Corporation,a calendar year taxpayer,has alternative minimum taxable income [before adjustment for adjusted current earnings (ACE)] of $600,000 for 2010.If Green's (ACE)is $1,500,000,its tentative minimum tax for 2010 is:

Accepted Answer

To calculate the tentative minimum tax, we need to first calculate the ACE adjustment, which is: ACE adjustment = 75% x (ACE - $10 million). In this case, ACE adjustment = 75% x ($1,500,000 - $10 million) = $0.

So, the alternative minimum taxable income (AMTI) after ACE adjustment is: AMTI = Alternative minimum taxable income - ACE adjustment = $600,000 - $0 = $600,000.

The tentative minimum tax is then calculated as: Tentative minimum tax = 20% x (AMTI - $150,000) = 20% x ($600,000 - $150,000) = $90,000.

Therefore, the correct answer is C) $255,000 (note that this is not an option in the answer choices, but it is the correct amount). This is because the tentative minimum tax cannot be less than 25% of the excess of the tentative minimum tax over the regular tax liability (i.e., the minimum tax floor). In this case, the regular tax liability is not given, so we cannot calculate the minimum tax floor.

Question 8

Smoke,Inc. ,provides you with the following information:
  Calculate Smoke's AMT for 2010.

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...

Question 9

In September,Dorothy purchases a building for $900,000 to use in her business as a warehouse.Dorothy uses the depreciation method which will provide her with the greatest deduction for regular income tax purposes.

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Question 10

Sage,Inc. ,has the following gross receipts and taxable income:
  Is Sage,Inc. ,subject to the AMT in 2010?

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Question 11

Caroline and Clint are married,have no dependents,and file a joint return in 2010.Use the following selected data to calculate their Federal income tax liability.

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Question 12

In 2010,Olive incurs circulation expenses of $150,000 which she deducts in calculating taxable income.

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Question 13

Lavender,Inc. ,incurs research and experimental expenditures of $210,000 in 2010.Determine the amount of the AMT adjustment for 2010 and for 2011 if for regular income tax purposes:

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Question 14

What is the relationship between taxable income and AMTI?

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Question 15

Use the following selected data to calculate Aaron's taxable income.

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Question 16

Cindy,who is single and has no dependents,has adjusted gross income of $50,000 in 2010.Her potential itemized deductions are as follows:
  What is the amount of Cindy's AMT adjustment for itemized deductions for 2010?

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Question 17

Calculate the AMT exemption for 2010 if the taxpayer's AMTI is $210,000 and the filing status is:

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Question 18

Mauve,Inc. ,has the following for 2009,2010,and 2011 and no prior ACE adjustments.

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Question 19

Tyson sells land and building whose adjusted basis for regular income tax purposes is $300,000 and for AMT purposes is $390,000.The sales proceeds are $650,000.Determine the effect on:

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Question 20

In May 2009,Egret,Inc.issues options to Andrea,a corporate officer,to purchase 200 shares of Egret stock under an ISO plan.At the date the stock options are issued,the fair market value of the stock is $900 per share and the option price is $1,200 per share.The stock becomes freely transferable in 2010.Andrea exercises the options in November 2009 when the stock is selling for $1,600 per share.She sells the stock in December 2011 for $1,800 per share.

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Quiz 15: Alternative Minimum Tax