corporate_AMT_examples - • owns an office building with a...

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Corporate AMT examples Part 1 : For 2009, the Lowell Corporation reported the following transactions: Required : [a] Compute Lowell Corporation’s AMTI. [b] Determine the tentative minimum tax base. [c] Compute the tentative alternative minimum tax. [d] What is the amount of Lowell’s AMT? Part 2 : The TAMU Corporation reported the following information for 2009: Gross profit (sales – cost of goods sold) 8,000,000 Installment gain (recognized in 2009) 1,000,000 Dividends received (less than 20% ownership) 200,000 Tax-exempt interest income 3,000,000 Operating expenses (4,071,800) Charitable contribution (100,000) NOL carry forward (4,500,000) In addition, TAMU: reports that the tax exempt bonds were issued by the local county government to pay for the construction of new police & fire stations and road construction
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Unformatted text preview: • owns an office building with a depreciable basis of $5,000,000 (acquired in 1997) • has an AMT NOL carry forward $4,000,000 • sold land on the installment basis reporting 40% of the gain in 2009 Required : [a] Compute TAMU’s taxable income and regular income tax. [b] Compute TAMU's adjusted current earnings. [c] Compute TAMU's alternative minimum taxable income and AMT, if any. Taxable income 5,000,000 Cost recovery – real property (in service in 1990) Regular income tax 3,700,000 ADS 2,000,000 Cost recovery – pollution control facility Regular income tax 450,000 ADS 250,000 Tax-exempt interest on qualified private activity bonds 300,000 Percentage depletion in excess of property’s adjusted basis 700,000...
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