Gem Corporation,a calendar year taxpayer,has AMTI (before adjustment for adjusted current earnings)of $6 million for 2010.If Gem Corporation's ACE is $15 million,its tentative minimum tax for 2010 is:

Question

Quizplus · Accepted Answer

To calculate the tentative minimum tax (TMT), we need to first calculate the ACE limitation. The ACE limitation is 75% of the excess of ACE over AMTI.

ACE limitation = 75% x ($15 million - $6 million) = $6.75 million

The TMT is then the greater of the regular tax or 20% of the excess of AMTI over the ACE limitation.

Regular tax is not given in the question, so we need to calculate the excess of AMTI over the ACE limitation:

Excess of AMTI over ACE limitation = $6 million - $6.75 million = -$750,000

Since this is negative, the TMT is simply the regular tax, which is less than zero. Therefore, the TMT is zero.

So, none of the answer choices are correct.

Gem Corporation,a Calendar Year Taxpayer,has AMTI (Before Adjustment for Adjusted