FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 14: Business Tax Credits and Corporate Alternative Minimum Tax

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 51

True/False

Review LaterAdd Note

Review Later

The sale of business property might result in an AMT adjustment.

A) True
B) False

Correct Answer

verified

Show Answer

Question 52

True/False

Review LaterAdd Note

Review Later

Cher sold undeveloped land that originally cost $150,000 for $225,000.There is a positive AMT adjustment of $75,000 associated with the sale of the land.

A) True
B) False

Correct Answer

verified

Show Answer

Question 53

Essay

Review LaterAdd Note

Smoke,Inc.,provides you with the following information: $\begin{array}{ll}\text{Regular corporate tax liability}&\$22,250\\\text{AIVI adjustments and preferencess (excluding ACE adjustment)}&80,000\\\text{ACE adjustment (prior positive adjustments are } \$17,000&(11,000)\\\text{Taxable income}&100,000\end{array}$ Calculate Smoke's AMT for 2013.

Steve has a tentative general business credit of $110,000 for the current year.His net regular tax liability before the general business credit is $125,000,and his tentative minimum tax is $100,000.Compute Steve's allowable general business credit for the year.

In calculating the AMT using the indirect method,do AMT adjustments and AMT tax preferences increase or decrease AMTI?

Qualified rehabilitation expenditures include the cost of acquiring the building,but not the cost of acquiring the land.

The tax benefits resulting from tax credits and tax deductions are affected by the tax rate bracket of the taxpayer.

In May 2009,Cindy incurred qualifying rehabilitation expenditures of $500,000 on a certified historic structure and properly claimed the tax credit for rehabilitation expenditures.In March 2013,she sold the building at a loss.Calculate the rehabilitation expenditures credit recapture that she must report in 2013.

The tax benefit received from a tax credit is never affected by the tax rate of the taxpayer.

Joel placed real property in service in 2013 that cost $900,000 and used MACRS for regular income tax purposes.He is required to make a positive adjustment for AMT purposes in 2013 for the excess of depreciation calculated for regular income tax purposes over the depreciation calculated for AMT purposes.

The required adjustment for AMT purposes for pollution control facilities placed in service in 2013 is equal to the difference between the amortization deduction allowed for regular income tax purposes and the depreciation deduction computed under ADS.

Qualified research and experimentation expenditures are not only eligible for the 20% tax credit,but also can be expensed in the year incurred.

If a taxpayer is required to recapture any tax credit for rehabilitation expenditures,the recapture amount need not be added to the adjusted basis of the rehabilitation expenditures.

In January 2013,Tammy acquired an office building in downtown Syracuse,New York for $400,000.The building was originally constructed in 1932.Of the $400,000 cost,$40,000 was allocated to the land.Tammy immediately placed the building into service,but quickly realized that substantial renovation would be required to keep and attract new tenants.The renovations,costing $600,000,were of the type that qualifies for the rehabilitation credit.The improvements were completed in October 2013. a. Compute Tammy's rehabilitation tax credit for the year of acquisition b. Determine the cost recovery dechuction for 2013. c. What is the basis in the property at the end of its first year of use by Tammy?

The ACE adjustment can be positive or negative.

In 2013,Linda incurs circulation expenses of $240,000 which she deducts in calculating taxable income. a. Calculate Linda's AMT adjustment for circulation expenses for 2013, 2014, 2015, and 2016 b. Advise Linda on how she could reduce or eliminate the AMT adistment in 2013.

The disabled access credit is computed at the rate of 50% of all access expenditures incurred by the taxpayer during the year.

Some (or all)of the tax credit for rehabilitation expenditures will have to be recaptured if the rehabilitated property is disposed of prematurely or if it ceases to be qualifying property.

Under what circumstances are corporations exempt from the AMT?

In 2013,Glenn had a $108,000 loss on a passive activity.None of the loss is attributable to AMT adjustments or preferences.She has no other passive activities.Which of the following statements is correct?