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The Alternative Minimum Tax and Tax Credits
Solutions to Tax Research Problems
13-51 According to Ltr. Rul. 8349023 (8-31-83), the answer is yes, P will be allowed to take the credit on her return in the year she places the office building into service. In the letter ruling, it was held that a partnership that rehabilitated an old commercial building, and was entitled to an investment tax credit based on rehabilitation expenses incurred, may forgo claiming such credit and instead allow it to be claimed by the buyers of the building on the basis of their pro rata interest in the property as a further inducement to the purchase. This treatment will be allowed only if the partnership does not claim the allowable credit and does not place the building into service before the sale of the office units to the prospective buyers. The Court, in E.W. Zoltan, 79 TC 490, permitted the taxpayer to claim the credit for the portion of the costs incurred in sending her son on a week-long school field trip during a period when school was not in session. However, because a substantial purpose of the trip was educational, an allocation was required between qualifying and non-qualifying expenses, and the transportation issue was clarified. The cost of transportation of a qualifying individual to a place where care is provided outside the household is not considered to be incurred for the individual's care [Reg. 1.44A-1(c)(3)]. The Court held, however, that the expenses incurred for the transportation of the taxpayer's son to Washington are not disqualified by this language. The cost of transportation from her home to the place of departure of the bus to Washington is the type of expense that this language excludes. The care of her son commenced at that point. The transportation by bus to Washington began after her son was placed under the care of the supervisors of the expedition. This transportation was inseparably tied to that care, and does not fit within the disallowance provisions of Reg. 1.44A-1(c)(4). On the other hand, the Court held that a substantial portion of the expense incurred by the taxpayer to send her son to Washington constituted an educational expense of the type subject to allocation pursuant to Reg. 1.44A-1 (c)(3)(ii) and 1.44A-1(c)(5). Since neither the taxpayer nor the IRS made the allocation to educational expenses, the Court made one utilizing the Cohan rule, which requires an allocation that bears heavily against the taxpayer. To summarize, when the characterization of an expense is challenged under 44A(c)(2)(A)(ii), the issue is resolved by reference to the specific facts at hand; the Court must ascertain the taxpayer's motive. If the disputed expense was incurred with the dominant purpose of permitting the taxpayer to be gainfully employed and to ensure the child's well-being and protection while the taxpayer is so employed, it qualifies as employment-related despite the existence of other incidental benefits. A parent is not prohibited from choosing child care that carries incidental benefits, so long as the primary reason for the decision is the desire to ensure the protection and well-being of the child. In Zoltan, the Court made a factual finding, with respect to the Washington trip, that the taxpayer's primary concern was the care of her child. However, the expenses attributable to educational services must be carved out of the otherwise qualifying expense, since these services were substantial and were not incidental to, or inseparably a part of, the 13-52 5- 5- 5- 13-1 13-2 Chapter 13 The Alternative Minimum Tax and Tax Credits 13-53 5- care-related services. [Also see Warner v. Commissioner, 69 TC 995, 997 (1978), Brown v. Commissioner, 73 TC 156 (1979), and Perry v. Commissioner, 92 TC No. 28 (1989).] In Perry the taxpayer was not entitled to a child care credit for airfare expenses incurred to send the children to a care provider in another city. The airline cabin attendants were not under the direction of the care providers who met the children at the airport located in the other city. Under these facts, the transportation expenses were held not to be employment-related expenses. The issue in this problem is whether or not a charitable contribution will be allowed for the AMT system even though the charitable contribution is not allowed for the regular tax system. T's regular tax liability is determined as follows: Salary Schedule C (loss) AGI Qualified housing interest Taxes Charitable contributions* Exemptions in 2011 Taxable income (loss) $ 50,000 (60,000) ($ 10,000) (18,000) (6,000) 0 (7,400) ($ 41,400) *Subject to the 50% of AGI limitation, therefore no charitable contribution deduction is allowed for the current year. T's AMT is computed as follows: Taxable income (loss) Add back: Exemptions in 2011 Regular tax itemized deductions Tax preference items (incentive stock option) ($ 41,400) 7,400 24,000 90,000 $ 80,000 Subtract allowable ATIDS: Qualified housing interest Charitable contribution* AMTI Subtract AMT exemption AMT base AMT rate Tentative AMT Reg. tax AMT (18,000) 0 $ 62,000 (74,450) $ 0 26% $ 0 (0) $ 0 *Reg. 1.55-1(b) states that in determining the alternative minimum taxable income of a taxpayer other than a corporation, any references to the taxpayer's AGI in determining the amount of items of income, exclusion, or deduction must be treated as references to the taxpayer's AGI as determined for regular tax purposes. See Final Regulation 1.55-1(a). Under the regulation no charitable contribution deduction will be allowed in the AMT system. Therefore, in 2011 T will not have to pay an AMT. Solutions to Tax Research Problems 13-3 13-54 5- 5555- The policy underlying the Child Care Credit is to allow the taxpayer a subsidy with respect to child care expenses incurred in order to be gainfully employed. In the case of a taxpayer that is not married at the close of the taxable year, the employment related expenses are limited to the taxpayer's earned income. [ 21(d)(1)(A).] Earned income is defined in Reg. 1.44A-2(b)(2) as wages, salaries, tips, other employer compensation, and earnings from self employment. While there are special rules that allow a full time student to have deemed earned income for the purpose of this section, these rules appear to apply only to married taxpayers. [ 21(d)(2).] In Rev. Rul. 73-597, 1973-2 C.B. 69, it was decided that gratuitous services done by the taxpayer for charitable organizations were not gainful employment. Similarly, in Rev. Rul. 56-169, 1956-1 C.B. 135, it was decided that enrollment in educational courses did not qualify as gainful employment. Since K's income consists of alimony payments, child support payments, dividend income, and insubstantial payments from a charitable organization related to volunteer services, she does not have any earned income and no deemed earned income for the taxable year. Therefore, it does not appear that she will be entitled to a child care credit in the current year. Arguably, K could take the position that she earned the $15 a week and would be entitled to a Child Care Credit based on the total amount received from the library. 13
The Alternative Minimum Tax and Tax Credits
True or False 1. The AMT applies only to individual taxpayers. 2. Generally, business income tax credits reduce the AMT liability of individual taxpayers. 3. Taxpayers are allowed to use the double declining balance method of depreciation for both the regular tax and the AMT computations. 4. There is no difference between a tax preference item and an AMT adjustment. 5. If the taxpayer elects the ADS method of depreciation for regular tax purposes, he will also be allowed to use ADS for AMT purposes. 6. Circulation and research expenditures are AMT adjustments for both corporate and individual taxpayers. 7. The child care credit is always computed using the applicable percentage, which is 30% times the lesser of employment-related expenses or earned income. 8. An eligible small business can elect to take a non-refundable tax credit equal to the amount of the eligible disabled access expenditures exceeding $250 but not exceeding $10,250 for any taxable year. 9. The AMT applies only to taxpayers with a significant amount of tax preference items. 10. Taxpayers with lower marginal rates benefit more from tax deductions than do those in higher brackets, while credits provide equal benefits to all taxpayers. When a taxpayer takes the rehabilitation investment tax credit on qualified property, he or she is required to reduce the basis for depreciation of the asset by the amount of the credit claimed. The amount of basis reduction may be recaptured as ordinary income on a later sale of the property. 11. 13-5 13-6 Chapter 13 The Alternative Minimum Tax and Tax Credits 12. If a taxpayer had previously taken an investment credit on qualified property, and later, before the end of its recovery period, gave it to her daughter, there will be a recapture of investment credit on the original property. The amount of the child care credit can vary depending on the number of children that are qualified dependents. A good method to generate tax credits for high-income taxpayers is to purchase qualifying buildings for rehabilitation investment credit, renovate, and take either 10 percent or 20 percent of the renovation cost as a credit, then immediately sell the building and roll the proceeds from the sale into another renovation. The basis of the property must be reduced by 50 percent of the business energy credit claimed. The earned income credit is the same for a taxpayer with a six-year-old dependent and a taxpayer with a six-month-old dependent. A married couple must file a joint return in order to claim a child care credit. The majority of the persons old enough to qualify for the credit for the elderly will not be able to claim the credit because they also receive social security benefits. None of the nonbusiness credits can be carried forward to offset regular taxes imposed in subsequent years. The earned-income credit is refundable. 13. 14. 15. 16. 17. 18. 19. 20. Multiple Choice 21. The alternative minimum tax applies to which of the following? a. b. c. d. e. Individuals and corporations Corporations and estates Trusts and corporations Individuals and trusts All of the above 22. Which one of the following must be done before the AMT calculations can be made? a. b. c. d. e. The taxpayer's current taxable income must be calculated. The taxpayer's Federal tax liability for regular tax purposes must be calculated. AMT adjustments and tax preferences must be identified. Both a. and b. Choices a., b. and c. 23. Congress revised the AMT legislation to a. b. c. d. Simplify the procedures in accordance with the general principles of the Tax Reform Act of 1986 Increase the AMT burden on certain taxpayers with high income Do away with the separate tax calculations and the requirement of a separate set of books Implement all of the above modifications Test Bank 13-7 24. L earned $200,000 on the LPGA. She has deductible self-employment away-from-home expenses of $100,000 and current year's circulation expenditures of $90,000. L uses the standard deduction. Determine L's regular taxable income, and her alternative minimum taxable income. a. b. c. d. $10,000, $10,000 $6,900, $10,000 $95,900, $100,000 $500, $70,000 25. L earned $200,000 on the LPGA. She has deductible self-employment away-from-home expenses of $100,000 and current year's circulation expenditures of $90,000. L uses the standard deduction. Determine the regular tax liability and the AMT liability. a. b. c. d. $15,000, $2,100 $1,035, $2,100 $50, $5,553 $705, $8,400 26. T is married and files a joint return. The Ts have an AMTI of $350,000 and do not have a minimum tax foreign tax credit. The tentative minimum tax liability is a. b. c. d. $94,500 $79,300 $85,400 $84,000 27. Which one of the following is not an adjustment for individuals in computing the alternative minimum tax? a. b. c. d. e. Regular tax standard deduction Regular tax personal exemption Research and experimental expenditures Cost recovery deductions on assets placed in service after 1986 None of the above; all are adjustments. 28. Alternative tax itemized deductions (ATIDs) for individuals do not include a. b. c. d. e. Miscellaneous itemized deductions Itemized deductions relating to the payment of any tax Medical expenses Both a. and b. All of the above 29. S receives incentive stock options (ISOs) as part of a compensation plan. The unrestricted option is for 100 shares at $100 per share. S exercises the option five years later when the FMV of the stock is $190 per share. S holds the stock for five more years and then sells it for $225 per share. In the year of exercise, S has reportable amounts for regular tax purposes and for AMT purposes, respectively, of a. b. c. d. e. $19,000 and $0 $19,000 and $9,000 $0 and $9,000 $0 and $19,000 $0 and $0 13-8 Chapter 13 The Alternative Minimum Tax and Tax Credits 30. S receives incentive stock options (ISOs) as part of a compensation plan. The unrestricted option is for 100 shares at $100 per share. S exercises the option five years later when the FMV of the stock is $190 per share. S holds the stock for five more years and then sells it for $225 per share. Regarding the sale by S of the ISO stock, S will have a regular tax gain and AMT gain, respectively, of a. b. c. d. e. $2,500 and $12,500 $22,500 and $3,500 $13,590 and $12,500 $12,500 and $13,590 $12,500 and $3,500 31. M Corporation has gross receipts of $800,000 and an AMTI of $400,000 without regard to the ACE adjustment. M's adjusted current earnings are determined to be $600,000. M's regular tax liability is $60,000. M's AMTI is a. b. c. d. e. $350,000 $550,000 $600,000 $110,000 $50,000 32. Which one of the following is not a tax preference item used in computing the alternative minimum tax for an individual? a. b. c. d. e. Tax-exempt income from a Colorado Water Board bond Percentage depletion in excess of cost depletion on a silver mining property Tax-exempt interest on specified private activity bonds in tax years after 2012 Exclusion of gain on the sale of certain qualified small business corporation stock in tax years after 2012 None of the above; all are preference items. 33. Mr. and Mrs. T have one dependent and file a joint return which shows taxable income of $96,900, a regular tax liability of $16,475 and an AMT adjusted taxable income of $160,000. The T's also have a child care credit of $480 and a rehabilitation investment credit of $16,000. Determine the amount of the check (without regard to any possible penalties) that Mr. and Mrs. T must send to the IRS, and the amount of tax credits that can be carried back or forward. Assume Mr. and Mrs. T do not qualify for the child tax credit because the dependent is 18 years old and is incapacitated. a. b. c. d. e. $22,413, $16,000 $16,739, $10,000 $14,070, $0 $9,245, $0 $29,400, $16,480 34. Mr. W's tax liability for the year was $85,000 before claiming a general business tax credit. During the year, Mr. W qualified for $100,000 of general business credits. The general business credit allowed for the year is a. b. c. d. e. $100,000 $85,000 $70,000 $55,000 $25,000 Test Bank 13-9 35. Which of the following is not deductible in computing alternative minimum taxable income? a. b. c. d. e. Casualty losses Interest on a home equity loan used to purchase a new automobile Charitable contributions Medical expenses All of the above are deductible. 36. Which of the following is deductible in computing alternative minimum taxable income? a. b. c. d. e. State income taxes Property taxes on a personal residence Employee business expenses Tax preparation expenses None of the above 37. Which one of the following is a characteristic of the general business credit? a. b. c. d. e. Carried back three years if not used up currently Limited to $25,000 plus 75 percent of the net tax liability in excess of $25,000 At the end of the carryforward period, a deduction is determined with respect to the amount of credit that expired. Carried forward 15 years--applied on a first-in, first-out basis--for any part of the credit not used up in the carryback period All of the above 38. Which one of the following is a component of the general business credit? a. b. c. d. e. The alcohol fuels credit The disabled individual access credit The rehabilitation investment credit The business energy investment credit All of the above 39. R bought new solar panels to be used to heat water for a production process on May 4, 2011 for $100,000 (the qualified investment is $100,000). Assume that she sold the solar panels on May 31, 2012 for $90,000. She claimed and used the maximum energy investment credit in 2011, did not take any 179 expense, and used the MACRS tables to calculate the depreciation deduction. What was the amount of energy investment credit that was taken in 2011? a. b. c. d. e. $0--the energy investment credit was not allowed in 2011. $6,000 $100,000 $10,000 $30,000 40. R bought new solar panels to be used to heat water for a production process on May 4, 2011 for $100,000 (the qualified investment is $100,000). Assume that she sold the solar panels on May 31, 2012 for $90,000. She claimed and used the maximum energy investment credit in 2011, did not take any 179 expense, and used the MACRS tables to calculate the depreciation deduction. What is the amount of IC recapture tax that R must pay to the IRS in 2012? a. b. c. d. e. $0--the IC is fully earned. $2,000 $80,000 $8,000 $24,000 13-10 Chapter 13 The Alternative Minimum Tax and Tax Credits 41. R bought new solar panels to be used to heat water for a production process on May 4, 2011 for $100,000 (the qualified investment is $100,000). Assume that she sold the solar panels on May 31, 2012 for $90,000. She claimed and used the maximum energy investment credit in 2011, did not take any 179 expense, and used the MACRS tables to calculate the depreciation deduction. (Assume the solar panels have a class life of nine years and R used the half-year convention for computing cost recovery deductions in 2011.) On the sale of her solar panels on May 31, 2012, what is the amount of gain that must be reported by R with respect to the solar panels? a. b. c. d. e. $23,600 $10,000 $30,000 $70,000 $25,200 42. Which one of the following transactions is not a disposition of property that would cause a recapture of unearned investment credit? a. b. c. d. e. Property transferred by reason of death Business property converted to personal use Property destroyed by vandals Property that has been abandoned Property transferred by reason of gift 43. B purchased an old textile factory building in Chicago that had been certified as a historic structure. The purchase price was $1 million, and he spent $3 million this year renovating it. B's tax credit [without regard to possible limitations imposed by 38(c)] and his basis in the building are a. b. c. d. $60,000 credit; $4 million basis $300,000 credit; $3,700,000 basis $600,000 credit; $3,400,000 basis $600,000 credit; $400,000 basis 44. Which one of the following statements concerning the work opportunity tax credit is not true? a. b. c. d. The employer's current wage expense must be reduced by the amount of the jobs tax credit elected for the current year. The purpose of the credit is to encourage the hiring of persons from under-hired groups. To qualify, an individual must obtain certification from a designated local agency. The credit is available only for entry level jobs, or those paying less than $12,000 per year. 45. BobCo incurred $60,000 of qualifying research and experimentation expenses in 205. It had gross receipts of $420,000. Prior years' research expenses and gross receipts were Research Expenses $33,000 25,000 32,000 33,000 30,000 25,000 32,000 30,000 Gross Receipts $370,000 250,000 380,000 410,000 410,000 400,000 380,000 410,000 1986 1987 1988 2000 2001 2002 2003 2004 BobCo's tax liability before credits was $25,000. Its research credit for 2005 is: a. b. c. d. e. $25,000 $10,000 $20,000 $8,000 $4,800 Test Bank 13-11 46. Which one of the following is true concerning the low-income housing credit? a. b. c. d. e. Classified as a component of the general business credit Limited by an annual cap Only available for low-income housing constructed, rehabilitated, or acquired after 1986 Both a. and c. Choices a., b. and c. 47. Which one of the following does not describe the minimum tax credit? a. b. c. d. Indefinite carryforward Will never become a refundable credit Offsets any future regular tax liability Referred to as the adjusted net minimum tax 48. W, a widower, maintains a household for himself and two preschool children, for whom he is entitled to a dependency deduction. He has adjusted gross income of $25,000: $20,000 wages and $5,000 interest. W paid employment-related expenses of $4,000 for household services within his home, and paid $1,200 child care expenses at a nursery school. His child care credit for the year is a. b. c. d. e. $1,560 $1,144 $1,200 $1,440 None of the above 49. Which one of the following child or dependent care expenses qualifies as an employment-related expense? a. b. c. d. e. Payments to a full-time nursing home for your dependent mother-in-law who is not mentally nor physically incapacitated Payments for transportation to and from nursery school Payments to a lawn service when a child is cared for in the home Payments to a nursery school for your preschool children None of the above 50. When D leaves home to go to her job, she pays the neighbor to watch over her 89-year-old mother, M. The latter has lived with D for five years and has only $1,000 includible gross income each year. If D has no taxable income this year and has a $300 dependent care credit, she may a. b. c. d. Obtain a $300 tax refund this year for the credit Carry the $300 credit back three years and then forward 15 years Carry the $300 credit forward indefinitely Not use the $300 credit for any purpose 51. Which one of the following is not an example of a refundable credit? a. b. c. d. e. The credit for federal income tax withheld on salary Earned income credit Credit for the elderly, or permanently and totally disabled Quarterly estimated tax payments Credit for Federal tax on gasoline and special fuels 52. J, a sole proprietor, had gross receipts of $500,000 last year and incurred $15,000 of eligible access expenditures this year. J's disabled access credit for this year is a. b. c. d. e. $7,500 $5,000 $0 $1,500 $3,000 13-12 Chapter 13 The Alternative Minimum Tax and Tax Credits 53. C, a single mother, has modified AGI of $42,000. In 2011, C's daughter, D, begins studying for her bachelor's degree as a full-time student at County University. On September 1, C pays $3,000 in qualified tuition for D's first semester. The amount of allowable American Opportunity Tax Credit scholarship credit allowed to C is a. b. c. d. e. $2,500 $1,800 $1,350 $400 $0 54. H and W are married and have three children. At the close of 206, the children, X, Y, and Z, were ages 12, 16 and 18 respectively. H and W claim a dependency exemption for each of the children. This year H and W reported adjusted gross income of $104,200. The allowable child tax credit for H and W is a. b. c. d. e. $1,500 $2,000 $400 $550 $0 55. H and W are married with three children. At the close of 206, the children, X, Y, and Z, were ages 2, 6, and 8, respectively. H and W claim a dependency exemption for each of the children. This year H and W reported adjusted gross income of $115,500. The allowable child tax credit for H and W is a. b. c. d. e. $2,700 $0 $1,200 $1,000 $900 56. M is a single mom raising one child at home, age 16. M may claim a dependency exemption for her child. This year M earned $70,000 as salary and had investment income of $12,500. The allowable child tax credit for M is a. b. c. d. e. $400 $150 $600 $250 $500 57. D is a single dad and has modified AGI of $39,000. This year D's son begins his junior year of college as a half-time student at Arapahoe College. On September 1, D pays $2,000 in qualified tuition for his son's fall semester. The amount of tax credit available to D is a. b. c. d. e. $2,000 $1,500 $500 $0 $1,000 58. H and W are married and have twins that are attending State University as freshmen this year. State University is on the semester system and charges $1,000 tuition per semester. H and W pay State University $2,000 this year. H and W have adjusted gross income of $170,000. The allowable American Opportunity Tax Credit for H and W is a. b. c. d. e. $2,000 $400 $600 $1,000 $0 13
The Alternative Minimum Tax and Tax Credits
Solutions to Test Bank
True or False 1. False. The AMT applies to all taxpayers: individuals, estates, trusts, and C corporations. Note that partnerships and S corporations are not "taxpayers" but flow-through entities. Partners and S corporation shareholders are subjected to AMT as are all individuals. (See p. 13-3 and 55.) 2. False. To ensure that taxpayers who are subject to AMT pay some tax, most income tax credits are not available to reduce the tentative minimum tax, with the exceptions of the AMT foreign tax credit and the empowerment zone credit which can offset 25% of the AMT. (See p. 13-4.) 3. False. For AMT purposes taxpayers can use a maximum 150 percent declining-balance for tangible personal property and straight-line for real property. [See Exhibit 13-4, Example 3 and pp. 13-7 through 13-9 and 56(a)(1).] 4. False. Although adjustments and preferences serve a similar purpose, they are not identical. Preferences generally require only an add-back to income. Adjustments generally call for the complete substitution of some special AMT treatment for the regular treatment. More importantly, adjustments could increase or decrease alternative minimum taxable income. (See p. 13-7.) 5. True. If the taxpayer elects ADS under 168(g)(7) for regular tax purposes, that system can be used for AMT purposes. [See Exhibit 13-4, p. 13-9 and 56(a)(1)(A).] 6. False. Circulation and research expenditures are AMT adjustments for individual taxpayers only. Note that this falls within the section of the chapter beginning on p. 13-10 entitled Adjustments Applicable Only to Individuals. [See p. 13-12 and 56(b)(2).] 7. False. The applicable percentage of 30% must be reduced by one percentage point for each $2,000 of the taxpayer's A.G.I. in excess of $10,000, but it cannot be reduced below 20%. (See p. 13-46.) 8. False. The amount of the credit is 50 percent of the eligible expenditures. (See p. 13-39.) 9. False. The AMT could apply to taxpayers that have no preference items, if the taxpayer has a significant amount of AMT adjustments. In addition, if the taxpayer has large tax credits that offset the regular tax, the AMT may be imposed. (See Exhibit 13-1 and p. 13-5.) 13-13 13-14 Chapter 13 The Alternative Minimum Tax and Tax Credits 10. False. The first part of the statement is not true. Taxpayers in higher marginal rates have more income taxed at a higher rate to offset with deductions and therefore derive greater benefit. All taxpayers derive the same dollar benefit from credits. (See p. 13-26.) True. Section 50(c) requires the basis to be reduced by the full rehabilitation credit claimed. Section 50(c)(4) provides that if the taxpayer reduced the basis for depreciation by the rehabilitation tax credit claimed, such basis reduction will be treated as a deduction for depreciation for purposes of 1245 and 1250. Accordingly, on a later sale of the property, the amount of the basis reduction could be recaptured as ordinary income if 1245 or 1250 applies. (See footnote 69 and p. 13-31.) True. When property on which IC has been claimed is disposed of, the taxpayer must recapture part of the investment tax credit, depending on how long the property has been held. This applies even if the taxpayer makes a gift of the property. [See p. 13-32 and 50(a) and Reg. 1.47-2.] True. The maximum amount of employment related expenses that can be taken into account is $2,400 for one qualified dependent and $4,800 for two or more qualified dependents. (See p. 13-46.) False. Although renovating old buildings and taking the tax credit is an excellent way to generate a tax credit, the flaw in problem 14 is that early sale or transfer of the property will probably trigger recapture of the credit. [See pp. 13-31 and 13-32 and 50(a).] True. Under 50(c)(3), the basis of property must be reduced by 50 percent of the business energy credit claimed. This basis reduction will, for purposes of 1245 and 1250, be treated as depreciation and therefore may result in recapture as ordinary income upon later sale of the property. (See Example 22, and p. 13-31.) True. Prior to 1994, there was an additional earned income supplemental young child credit equal to 5% that was allowed for a qualifying child that had not attained one year of age as of the close of the taxable year. The RRA of 1993 repealed this provision and currently children of all ages will count the same for purposes of this credit. (See p. 13-61.) True. A married couple must file a joint return to claim a child care credit. [See p. 13-47 and 21(e)(2).] True. The reduction in the 22 amount for social security payments and for one-half of A.G.I. in excess of the 22 amount combine to disallow the credit for most of the elderly. (See p. 13-56.) False. The credit for interest on home mortgages can be carried forward for three years. (See p. 13-56.) True. The earned-income credit is not limited to the amount of the taxpayer's tax liability. It is refundable for taxpayers who have a tax liability less than the credit or who in fact have no tax liability. (See p. 13-58.) 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. Multiple Choice 21. 22. 23. e. e. b. Under 55(a), the alternative minimum tax applies to corporate and non-corporate taxpayers. Therefore, it applies to individuals, trusts, estates, and corporations. (See p. 13-4.) (See Exhibit 13-1 and pp. 13-4 and 13-5.) Answers a. and c. were not part of the AMT revision in TRA 1986. (See p. 13-4.) Solutions to Test Bank 13-15 24. d. See computations below. Regular Tax Calculation Gross Income Traveling expenses Circulation expenditures A.G.I. Standard deduction Exemption Taxable income $ 200,000 $(100,000) (90,000) $ (5,800) (3,700) $ (190,000) $ 10,000 (9,500) 500 Alternative Minimum Tax Calculation Taxable income Standard deduction and personal exemption Adjustment for circulation expenditures AMT adjusted TI (also AMTI) $ 500 9,500 60,000 $70,000 *Adjustment for circulation expenditures: Allowed for Regular tax Allowed for AMT $ 90,000 (30,000) $ 60,000 (See Exhibit 13-1 and p. 13-13.) 25. c. See computations below: Regular Tax Liability Taxable income Tax rate Total $ 500 10% $ 50 AMT Liability AMT adjusted taxable income Exemption AMT base AMT rate Tentative AMT Regular tax AMT (See solution to Problem 1324, Exhibit 13-1, and p. 13-8.) $ 70,000 (48,450) $ 21,550 26% $ 5,603 (65) $ 5,553 13-16 Chapter 13 The Alternative Minimum Tax and Tax Credits 26. a. The exemption is phased out at the rate of 25 cents per dollar of AMTI in excess of $150,000. At $346,000 the exemption is phased out completely. AMTI Exemption $350,000 (0) $350,000 $ 94,500 Tentative AMT (26% $175,000 28% $175,000) (See Exhibit 13-1, Example 2, and p. 13-6.) 27. 28. e. d. All the items listed in a. through d. are adjustments that individuals must make in computing the AMT. Therefore, the correct answer is none of the above. (See Exhibit 13-3, p.13-8, and 56.) ATIDs do not include miscellaneous itemized deductions or itemized deductions relating to payment of tax. Medical expenses are included in ATID, but only in excess of 10 percent of A.G.I. (See p. 13-12.) When S exercises the ISO, she has an AMT tax preference item of $9,000 ($19,000 FMV $10,000 cost basis). No income is required to be reported for regular income tax purposes when an ISO is exercised. If S sells the stock in the exercise year, the $9,000 will not be considered a preference item for the AMT calculation. (See Example 5 and p. 13-13.) The AMT gain is the sale price ($22,500) minus the value of the ISO at its exercise ($19,000), or $3,500. The gain for regular tax purposes is greater because the basis was not adjusted at the time of exercise ($22,500 $10,000 $12,500). One set of books will show the gain for regular tax purposes, and the other set will show the AMT gain. (See Example 6 and p. 13-13.) M's AMTI is $550,000. See calculations below. AMTI before ACE Plus ACE adjustment ($ 600,000 $ 400,000) 75% AMTI AMT rate Tentative AMT Regular tax AMT $400,000 150,000 $550,000 20% $110,000 (60,000) $ 50,000 29. c. 30. e. 31. b. (See Example 7 and pp. 13-4 and 13-14.) 32. a. The items of tax preference, listed in 57, do not include tax-exempt income unless the bond is a specified private activity bond issued after August 7, 1987. (See pp. 13-16 and 13-17.) Solutions to Test Bank 13-17 33. a. See calculations below. Regular tax liability on taxable income of $96,900 $16,475 Alternative Minimum Tax Calculations AMT adjusted taxable income Exemption $74,450 [25% ($160,000 $150,000 $10,000) $2,500] $ 71,950 AMTI AMT rate Tentative AMT Regular tax liability AMT before personal credits Child care credit AMT $ 160,000 (71,950) $ 88,050 26% $ 22,893 (16,475) $ 6,418 (480) $ 5,938 A check must be written for $22,413 ($22,893 TAMT $480 child care credit) or alternatively the regular tax ($16,475) plus the AMT ($5,938). For 2004 through 2012 nonrefundable personal credits may be offset againt the regular tax and the AMT. Section 38(c) specifies that the IC will be allowed only to the extent that the taxpayer's regular income tax liability is greater than the Tentative AMT. These provisions serve to turn the rehabilitation credit into a $16,000 business credit carryback. [See p. 13-4; 26(a) and 38(c); and instructions to Form 1040 p. 2, Form 3800, and Form 6251.] 34. c. Under 38(c)(1), the general business tax credit is limited to 100 percent of the amount of tax liability up to $25,000 plus 75 percent of the tax liability in excess of $25,000. W's limit is $25,000 plus 75% ($85,000 $25,000), for a total of $70,000. Even though the tentative credit is $100,000, only $70,000 may be used this year. (See Example 21 and p. 13-28.) Only qualified housing interest is deductible which is defined as interest on debt incurred in acquiring, constructing or substantially rehabilitating property that is a principal residence or a secondary residence. Interest on a home equity loan used to purchase a car is not deductible for AMT purposes even though it is deductible for regular tax purposes (See p. 13-11.) Only select itemized deductions are deductible for AMT purposes. There is no deduction for taxes or miscellaneous itemized deductions. The itemized deductions commonly allowed are medical expenses, qualified housing interest, charitable contributions, and casualty or theft losses. (See p. 13-11.) Choices a., b., c. and d. are correct statements about the general business credit. (See pp. 13-28 through 13-29.) Choices a., b., c. and d. constitute the three distinct parts of the general business credit. (See Exhibit 13-7 and pp. 13-27 through 13-28.) 35. b. 36. e. 37. 38. e. e. 13-18 Chapter 13 The Alternative Minimum Tax and Tax Credits 39. e. See computation below. $100,000 30% $ 30,000 Maximum allowable rate for 2011 on solar energy property (See Example 23, and p. 13-30.) 40. e. R used the property in the trade or business for one full year; therefore, her recapture percentage is 80 percent. In other words, the credit was earned at 20 percent per year and was 20 percent earned at disposition, leaving 80 percent to be recaptured. Because the full amount of the IC claimed was used to reduce R's taxes (i.e., no carryover remains) it is all potentially recapturable. $30,000 80% $24,000 (IC recapture that must be paid to the IRS as an additional tax) (See Exhibit 13-8, Example 26, and p. 13-31.) 41. a. A key determinant of the basis of the property is reduction for any energy credit claimed. The credit for solar panels in 2011 was $30,000 (30% $100,000) and the basis is reduced for 50% of this amount or $15,000. See computations below. Cost of solar panels Basis reduction (1/2 of depreciable basis) 2011 MACRS ded. ($85,000 20%*) 2012 MACRS ded. ($85,000 32% yr.) Total MACRS Basis prior to sale $100,000 (15,000) $ 85,000 $ (17,000) (13,600) (30,600) $ 54,400 Add the 50 percent of IC recapture [or the 50(c) reverse adjustment]: Basis before sale 50(c) reverse adjustment Adjusted basis Amount realized Adjusted basis Gain $54,400 12,000 $66,400 $90,000 (66,400) $ 23,600** *Nine-years class life is five-years recovery property. **All ordinary income since it does not exceed the depreciation taken. (See Examples 23, 24 and 26, footnote 69 and pp. 13-30 through 13-32.) 42. a. Section 50(a) requires the recapture of investment credit if property on which it has been taken is disposed of prematurely. Under 50(a)(4), a transfer by reason of death is specifically excluded from dispositions that would result in the recapture of the investment tax credit. Answers b., c. and d. are incorrect because each is a disposition of property that causes the recapture of IC. (See pp. 13-31 and 13-32.) Qualified investment Rate of credit Current IC $3,000,000 20% $ 600,000 Purchase price plus remodeling Less credit Basis in building $4,000,000 (600,000) $3,400,000 43. c. (See Examples 20 and 25 and pp. 13-29 through 13-30.) Solutions to Test Bank 13-19 44. d. There is no restriction on the type of job or the amount of compensation. The maximum credit is equal to 40 percent of the first $6,000 of qualified first-year wages, or $2,400. (See pp. 13-33 and 13-34.) R&E credit 20% (Qualified R&E expenditures Base amount). Fixed base percentage $90,000 $1,000,000 9% Base amount 9% $1,600,000/4 $36,000 RE credit 20% ($60,000 $36,000) $4,800 45. e. (See Exhibit 13-9, Example 28, and pp. 13-35 through 13-38.) 46. 47. 48. e. b. a. (See p. 13-38.) (See pp. 13-19 through 13-22 and 53(e).) The child care credit is equal to the applicable percentage of employment-related expenses paid during the taxable year. [See 21(a).] The applicable percentage is 35 percent reduced (but not below 20%) by one percentage point for each $2,000 (or part thereof) by which the taxpayer's adjusted gross income for the taxable year exceeds $15,000. The amount of employment-related expenses incurred during any taxable year that may be taken into account in computing the credit may not exceed $3,000 if there is one qualifying individual, and $6,000 if there are two or more qualifying individuals. [See 21(c).] Mr. W's employment-related expenses are $5,200. The applicable percentage is reduced to 30 percent, since W's adjusted gross income exceeds $15,000 by $10,000, and $10,000/$2,000 5 percent. W's child care credit for the year is $1,560 ($5,200 30%). (See Example 35 and pp. 13-44 through 13-47.) Employment-related expenses are paid for household services and for the care of a qualifying individual. [See 21(b)(2).] The amount paid to a nursery school in which a qualifying child is enrolled is considered as being for the care of the child. [See Reg. 1.44A-1(c)(3).] Answer c. is incorrect because expenses are not considered paid for household services unless the expenses are attributable in part to the care of the qualifying individual. Thus, amounts paid for the services of a chauffeur, bartender, or gardener are not considered expenses paid for household services. [See Reg. 1.44A-1(c)(2).] Answer b. is incorrect because expenses incurred for transportation of a qualifying individual to the place where the services for care are provided are not incurred for the care of a qualifying individual. [See Reg. 1.44A-1(c)(3).] Answer a. is incorrect because the credit is allowed with respect to employment-related expenses incurred for services performed outside the household of the taxpayer only if the expenses are incurred for the care of a dependent under age 13 or for any other qualifying individual who spends at least eight hours per day in the taxpayer's household. [See p. 13-45 and 21(b)(2)(B).] The child and dependent care credit is non-refundable and can only be used to offset tax in the year it is earned. (See p. 13-48.) The credit for the elderly and permanently and totally disabled is a non-refundable credit. (See p. 13-53.) The disabled access credit is equal to 50 percent of the amount of the eligible access expenditure, exceeding $250 but not exceeding $10,250 for any taxable year. The maximum credit is therefore $5,000 ($10,000 50%). (See p. 13-39 and Example 30.) C is entitled to the maximum American Opportunity Tax Credit of $2,500 (100% of $2,000 plus 25% of $1,000). The phase out rule for high-income taxpayers does not apply to C. $42,000 $80,000 Reduction of Total $0 $2;500 allowable credits $10,000 Thus, C in entitled to a $2,500 HOPE credit. (See Example 38 and pp. 13-49 through 13-51.) 49. d. 50. 51. 52. d. c. b. 53. a. 13-20 Chapter 13 The Alternative Minimum Tax and Tax Credits 54. b. H and W may claim a child credit for X and Y since they are both dependents and did not attain the age of 17 before the close of the year. The amount of the credit is $2,000 determined as follows: Tentative credit for each child Qualifying children Tax credit before phase-out Reduction: Adjusted gross income Threshold for joint return Excess adjusted gross income $ 1,000 2 $ 2,000 $ 104,200 (110,000) $ 0 There is no reduction because the AGI does not exceed the threshold amount. (See Exhibit 13.10, Example 33 and pp. 13-43 through 13-44.) 55. a. Tentative credit for each child Qualifying children Total credit before phase-out Reduction: Adjusted gross income Threshold for joint return Excess adjusted gross income Reduction [($5,500/$1,000 5.5 rounded up to 6) $50] Child credit allowed for children $ 1,000 3 $ 3,000 $ 115,000 (110,000) $ 5,500 $ (300) $ 2,700 (See Exhibit 13.10, Example 33 and pp. 13-43 through 13-44.) 56. c. Tentative credit for each child Qualifying children Total credit before phase-out Reduction: Adjusted gross income Threshold for joint return Excess adjusted gross income Reduction [($7,500/$1,000 7.5 rounded up to 8) $50] Child credit allowed for children (See Exhibit 13.10, Example 33 and pp. 13-43 through 13-44.) 57. a. D will qualify for the Hope Credit as modified by the American Opportunity Credit Life-time Learning Credit which is 20% of the $2,000 paid for qualified expenses during 2011 or $2,000. The phase-out of the credit does not begin for a single taxpayer until A.G.I. exceeds $80,000. (See Exhibit 13.12, Example 38 and pp. 13-49 through 13-51.) Without the income limitations, H and W would be entitled to a American Opportunity Tax Credit of $2,000 (100% of $1,000 times two children). However, taking into account the income limitations, H and W's credit is reduced by $1,000 as computed below. $170,000 $160,000 $10,000 Reduction of Total $1,000 $2; 000 allowable credits $20,000 Thus, H and W are entitled to a $1,000 AOTC credit. (See Exhibit 13.12, Example 38 and pp. 13-49 through 13-51.) $ 1,000 1 $ 1,000 $ 82,500 (75,000) $ 7,500 (400) 600 $ 58. d. 13
The Alternative Minimum Tax and Tax Credits
1. Mr. and Mrs. P have two children, file jointly, and have an A.G.I. of $60,000. Included as deductions for A.G.I. are $60,000 of percentage depletion on a gold mining property in excess of the adjusted basis of the property. Their itemized deductions are medical expenses (before the reduction of 7.5% of A.G.I.) of $6,400, interest of $32,000 (of which $12,000 is qualified housing interest and $20,000 is investment interest), and taxes of $10,000. The Ps have net investment income of $16,000. a. Calculate the following and show your work: (1) Regular tax itemized deductions, (2) Regular tax taxable income, and (3) Regular tax liability. Calculate the following and show your work: (1) ATIDs, (2) Total tax preference items, (3) AMTI, (4) AMT exemption, and (5) Tentative minimum tax. Calculate the following and show your work: (1) AMT, and (2) Net tax due with the return, if any. b. c. 2. J is married, files a joint return, and has taxable income of $28,000 (without regard to the gain from the sale of a truck). Included in his taxable income was a premature distribution from a qualified retirement annuity on which a tax of $2,500 was imposed by 72(q), in addition to $1,000 of Federal income tax withheld by the payor. J and his wife are entitled to a child tax credit of $1,000, a child and dependent care credit of $400, a research credit carryover of $2,000, a home mortgage credit certificate credit carryover of $700, and a minimum tax credit carryover of $1,500. J's employer withheld $1,800 in Federal income taxes and $2,075 of FICA tax. 13-21 13-22 Chapter 13 The Alternative Minimum Tax and Tax Credits In January 2011, J sold a truck for $1,400 that he acquired in December of 1985. The following is tax information for 1985 with respect to the U-Haul truck: 1. Cost of truck First-year expensing Adjusted basis The 10% IC is elected Applicable percentage Qualified investment IC rate IC Then the adjusted basis for the ACRS table calculation was reduced by the 50(c) adjustment Unadjusted basis 3. ACRS depreciation from table ACRS cost recovery for 1985 $ 45,000 (5,000) $ 40,000 100% $ 40,000 10% $ 4,000 $ 40,000 (2,000) $ 38,000 15% $ 5,700 2. The cost recovery deductions for 1985 through 1989 are as follows: ACRS for 1985 ($38,000 15%) ACRS for 1986 ($38,000 22%) ACRS for 1987 ($38,000 21%) ACRS for 1988 ($38,000 21%) ACRS for 1989 ($38,000 21%) Total a. Calculate the following and show your work: (1) (2) (3) (4) b. Determine the basis of the truck prior to the sale, Determine the gain on the sale of the truck, Determine J's taxable income, and Determine J's regular tax liability. $ 5,700 8,360 7,980 7,980 7,980 $38,000 Calculate the following and show your work (you may wish to use page 2 of Form 1040 as a guide): (1) Determine the 26 tax liability reduced by all the allowable credits (Form 1040, line 47), and (2) Determine the amount of any credit carryovers to 2012. c. Calculate the following and show your work: (1) Determine the total amount of other taxes imposed on J, (2) Determine the amount of taxes withheld or paid by J, and (3) Determine the amount of the check payable to the IRS or the refund due J. Comprehensive Problems 13-23 3. G, a single professional golfer, won $600,000 on the PGA tour in 2011. While away from home, he incurred deductible traveling expenses of $100,000 (after the 50% cutback for meals) and circulation expenditures on a new golfing magazine of $450,000. G made four quarterly estimated tax payments of $3,000 each, based on his 2010 Federal income tax liability of $12,000. G also has a rehabilitation tax credit of $6,000. Determine the total amount of the check that G will have to make payable to the IRS and attach to his Form 1040. a. Calculate the following and show your work: (1) (2) (3) b. Regular tax adjusted gross income, Regular tax taxable income, and Regular tax liability. Calculate the following and show your work: (1) (2) (3) (4) The AMT adjustment for the circulation expenditures, The total net positive AMT adjustments, The net amount of AMT preference items, and The allowable AMT exemption. c. Calculate the following and show your work: (1) (2) (3) The tentative AMT, The AMT, and Net tax due with the return, if any. d. Calculate the following and show your work: (1) The 2011 AMT adjustment for circulation expenditures, (2) The minimum tax credit carryover to 2012, and (3) The safe amount of each quarterly estimated tax payment for the 2012 taxable year. 13-24 Chapter 13 The Alternative Minimum Tax and Tax Credits Solutions to Comprehensive Problems
1. a. Regular Tax Calculation A.G.I. Medical ($6,400 $4,500) Housing interest Other interest* Taxes Total itemized deductions Exemptions ($3,650 4) Taxable income Tax liability, 2011 tax rate schedule* (Solutions are prepared for the tax year 2011.) $ 60,000 $ (1,900) (12,000) (16,000)* (10,000) (39,900) (14,800) $ 5,300 $ 530 (1) (2) (3) 11b. Alternative Minimum Tax Calculation Taxable income Regular tax itemized deductions Personal exemptions *$16,000 allowed under 163(d) Less AMTI itemized deductions Medical ($6,400 $6,000) Housing interest Invest. int. (limited to investment income) Total ATIDs AMT adjusted taxable income Add tax preference items Percentage depletion on gold mining property in excess of cost basis Total tax preference items AMTI Exemption AMT base Tentative AMT $ (400) (12,000) (16,000) (28,400) $31,600 $ 60,000 $ 5,500 39,900 14,800 $60,000 (1) (2) (3) (4) (5) 60,000 $91,600 (74,450) $17,150 26% $ 4,459 Solutions to Comprehensive Problems 13-25 c. Tentative AMT Regular tax Child tax credits $ 4,459 (530) 3,929 (3,000) $ 0,929 (1), (2) The amount of the check payable to the IRS is $1,459; regular tax of $530 plus AMT of $1,929. (See Exhibit 13-1, Examples 12 through 14, and p. 13-14.) 2. Solutions are prepared for the tax year 2011. a. (1) The adjusted basis of the truck prior to its sale is $0. The truck was held six complete years after its acquisition, therefore there is no recapture of IC and no corresponding basis increase just prior to the sale. Gain on the sale of the truck is $1,400 and is 1245 ordinary income, as follows: Amount realized Adjusted basis Gain realized Gain recognized (3) Taxable income is $29,400, as follows: Taxable income without regard to the gain on the truck is (given in the problem) Gain on the sale of the truck Taxable income (4) b. (1) J's regular tax liability is $3,560. The tax liability on $29,400 of taxable income is $3,560, and it is equal to the 26 regular tax liability for J. Regular tax liability ( 26) Child and dependent care credit ( 21) Child tax credit ( 24) MCC ( 25) General business credit ( 38) Minimum tax credit ( 53) Tax liability reduced by allowable credits *See part 2b below. $ 3,560 (400) (1,000) (700) (1,460) 0* $ 0 $28,000 $1,400 (0) $1,400 $1,400 (2) 1,400 $29,400 13-26 Chapter 13 The Alternative Minimum Tax and Tax Credits (2) The remaining General Business Credit of $540 ($2,000 $1,460) and the AMT credit of $1,500 will be carried over until it can be used to offset a regular tax liability in a subsequent year. The FICA tax is an employment tax, will be paid in all events, is nondeductible for Federal income tax purposes, and cannot be reduced by credits against the Federal income tax. This problem assures that the minimum tax credit carryover does not qualify for Section 53(e). (See p. 13-24.) Other taxes imposed on J are as follows: Penalty tax imposed on early distribution Other taxes Total other taxes imposed on J $ $ 2,500 0 2,500 c. (1) (2) Federal Income Taxes withheld on J are as follows: Withheld from retirement plan distribution Withheld from wages Total tax withheld $ $ 1,000 1,800 2,800 (3) The total amount of the refund that J may claim on his return is determined as follows: Tax liability reduced by allowable credits Total other taxes imposed Total payments (withheld) Amount of refund $ 0 2,500 (2,800) $ 300 Note that J still has $1,500 of minimum tax credit that carries over to 2012, and a $40 General Business credit carryover to 2012. Solutions are prepared for the tax year 2011. 3. a. Regular Tax Calculation Gross income Traveling expenses Circulation expenditures A.G.I. Standard deduction Exemption Taxable income Regular tax liability $ 600,000 $(100,000) (450,000) $ (5,800) (3,700) (550,000) $ 50,000 (9,500) $ 40,500 $ 6,250 (1) (2) (3) Solutions to Comprehensive Problems 13-27 b. (1) Adjustment for circulation expenditure Allowed for regular tax Allowed for AMT AMT adjustment $ 450,000 (150,000) $ 300,000 (2) Total positive AMT adjustments Circulation expenditures Standard deduction Personal exemption $300,000 5,700 3,650 $309,350 (3) (4) Net AMT preference items is $0 (none referenced in the fact pattern). Allowable AMT exemption is $0. Exemption is phased out at AMTI of $299,300. (See pp. 13-6 and 13-10 and Exhibit 13-2.) Alternative Minimum Tax Calculation Taxable income Standard deduction and personal exemption (from 2.b.) Adjustment for circulation expenditures (from 2.a.) AMT adjusted TI Exemption (phased out) AMT rates: 26% $175,000 28% $175,000 Tentative AMT Regular Tax AMT Net tax due with the return: Regular tax liability Add AMT Total tax Less payments Amount of check payable $ 40,500 9,500 300,000 $350,000 (0) $350,000 c. (1) (2) (3) $ 94,500 (6,250) $ 88,250 $ 6,250 88,250 $ 94,500 (12,000) $ 82,500 13-28 Chapter 13 The Alternative Minimum Tax and Tax Credits d. (1) 2011 AMT adjustment for circulation expenditures: Amount allowed for regular tax Amount allowed for AMT Net negative adjustment for 2011 $ 0 (150,000) $(150,000) (2) Minimum tax credit carryover: AMT shown on tax return for 2011 AMT computed with only permanent differences Taxable income Standard deduction Personal exemption AMTI Less exemption AMT base AMT rate Tentative AMT Regular tax AMT AMT credit available to offset 2012 regular tax $ 88,250 $ 40,500 5,800 3,700 $ 50,000 (48,450) $ 1,550 26% $ 403 6,250 0 $ 88,250 (3) The safe amount of the quarterly estimated tax payments for 2012 is 25 percent of the tax liability for 2011. Total tax for 2011 Rate Amount of each quarterly estimated payment $ 94,500 25% $ 23,625 Note: The AMT is really a prepayment of the income tax. Whenever Tiger earns additional taxable income, the minimum tax credit will offset the regular tax liability. Also the rehab credit is part of the general business credit, and 38(c) specifies that this credit cannot reduce the regular tax liability below the tentative minimum tax. The rehab credit is not absorbed in the current year and it is carried over to the following year as a $6,000 rehab credit. Of course the current year will count as a taxable year for the rehab credit carryover period. General business credits, other than the Employment Zone Credit, cannot be used to reduce the tentative minimum tax, so it cannot reduce the AMT. Of course when Tiger has a long-term unused minimum tax credit, it will be treated as a refundable credit in the amount of 50% of the long-term unused minimum tax credit. ...
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- Spring '11