Tanver Corporation,a calendar year corporation,has alternative minimum taxable income of $7 million in 2010 (before adjustment for adjusted current earnings).If Tanver's adjusted current earnings is $16 million,its tentative minimum tax for 2010 is:

Question

Quizplus · Accepted Answer

The tentative minimum tax for corporations is the greater of 20% of alternative minimum taxable income or the excess of 25% of adjusted current earnings over the regular tax liability (if any).

In this case, 20% of $7 million AMTI is $1.4 million.

25% of $16 million ACE is $4 million.

Since $4 million is greater than $1.4 million, the tentative minimum tax for Tanver Corporation is $4 million.

Tanver Corporation,a Calendar Year Corporation,has Alternative Minimum Taxable Income of $7