some_common_AMT_adjustments

some_common_AMT_adjustments - requires 16 months to...

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Some common AMT adjustments Part 1: Depreciation. In March 2009, Celtic Corporation acquired some 5-year property for use in their business at a cost of $100,000. Assume that Celtic does not elect Sec. 179. Required : [a] What is Celtic’s cost recovery for 2009 for regular income tax purposes? [b] What is Celtic’s AMT cost recovery for 2009? [c] What is Celtic’s AMTI adjustment for 2009? [d] What is Celtic’s ACE cost recovery for 2009? [e] What is Celtic’s ACE adjustment for 2009? Part 2: Gain or loss on disposal. Patriot sells an apartment building for $720,000. The building cost $600,000. Cost recovery of $314,000 has been taken for regular income tax purposes and $270,000 for AMT purposes. Required : [a] Compute Patriot’s gain for regular income tax purposes. [b] Compute Patriot’s gain for AMT purposes. [c] Compute Patriot’s AMT adjustment, if any. Part 3: Long-term construction contract. Bruin Corporation is a real estate construction company. Bruin uses the completed contract method on a contract that
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Unformatted text preview: requires 16 months to complete. The contract is for $500,000 with estimated costs of $300,000. At the end of 2009, $180,000 of costs had been incurred. The contract is completed in 2010 with the total cost being 295,000. Required : [a] Determine the amount of the adjustment for AMT purposes for 2009. [a] Determine the amount of the adjustment for AMT purposes for 2010. Part 4: Depletion. Revolution, Inc., owns a silver mine that it purchased several years ago for $925,000. The adjusted basis at the beginning of 2009 is $400,000. For the year, Revolution deducts the greater of cost depletion $290,000 or percentage depletion. Gross income from the property this year is $4,700,000. Required : [a] Calculate Revolution’s percentage depletion for 2009. [b] Calculate Revolution’s AMT adjustment for 2009. [c] Calculate Revolution’s adjusted basis for regular income tax purposes. [d] Calculate Revolution’s adjusted basis for AMT purposes....
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This note was uploaded on 03/04/2010 for the course TAX 6845 taught by Professor Kelliher,c during the Fall '08 term at University of Central Florida.

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