some_common_AMT_adjustments_solutions

some_common_AMT_adjustments_solutions - Solution Some...

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Solution : 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 (and 2010) for regular income tax purposes? [b] What is Celtic’s AMT cost recovery for 2009 (and 2010)? [c] What is Celtic’s AMTI adjustment for 2009 (and 2010)? [d] What is Celtic’s ACE cost recovery for 2009 (and 2010)? [e] What is Celtic’s ACE adjustment for 2009 (and 2010)? Solution : 2009 cost recovery Regular income tax (200% DB method – Table A-1) $100,000 x 20% $20,000 AMT (150% DB method – Table A-14) $100,000 x 15% $15,000 AMT adjustment ($20,000 – $15,000) + 5,000 ACE (150% DB method – Table A-14) $100,000 x 15% $15,000 ACE adjustment ($15,000 – $15,000) - 0 - 2010 cost recovery Regular income tax (200% DB method – Table A-1) $100,000 x 32% $32,000 AMT (150% DB method – Table A-14) $100,000 x 25.5% $25,500 AMT adjustment ($32,000 – $25,500) + 6,500 ACE (150% DB method – Table A-14) $100,000 x 25.5% $25,500 ACE adjustment ($25,500 – $25,500) - 0 - Note: Table references are to IRS Publication 946: How to Depreciate Property
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This note was uploaded on 09/09/2011 for the course TAX 6845 taught by Professor Kelliher,c during the Fall '08 term at University of Central Florida.

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some_common_AMT_adjustments_solutions - Solution Some...

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