CHAPTER 12--ALTERNATIVE MIN

Amt adjustments positive 22000 negative 25000 tax

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AMT adjustments Positive $22,000 Negative (25,000) Tax preferences 46,000 88. Caroline and Clint are married, have no dependents, and file a joint return in 2010. Use the following selected data to calculate their Federal income tax liability. AMTI $285,000 Regular income tax liability 42,844 AMT tax preferences 90,000 13
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89. Bianca and Barney have the following for 2010: Regular income tax before credits $36,200 Tentative AMT before credits 40,000 a. Calculate Bianca and Barney’s AMT if they qualify for the adoption expense credit of $3,500. b. Calculate Bianca and Barney’s AMT if they qualify for the adoption expense credit of $7,200. 90. Gunter, who is divorced, has the following items for 2010. Salary $60,000 Gain on sale of land held nine months (regular income tax basis is $4,000 less than AMT basis) 10,000 Traditional IRA contribution 5,000 Alimony paid 9,000 Itemized deductions: Charitable contributions $3,000 Home mortgage interest on his principal residence 4,000 State income taxes 2,000 9,000 Tax preferences 15,000 Calculate Gunter’s AMTI for 2010. 14
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91. Calculate the AMT exemption for 2010 if the taxpayer’s AMTI is $210,000 and the filing status is: a. Single. b. Married filing jointly. c. Married filing separately. 92. In 2010, Olive incurs circulation expenses of $150,000 which she deducts in calculating taxable income. a. Calculate Olive’s AMT adjustment for circulation expenses for 2010, 2011, 2012, and 2013. b. Advise Olive on how she could reduce or eliminate the AMT adjustment in 2010. 93. In September, Dorothy purchases a building for $900,000 to use in her business as a warehouse. Dorothy uses the depreciation method which will provide her with the greatest deduction for regular income tax purposes. a. Calculate the AMT adjustment for depreciation in 2010 if Dorothy purchased the building in 2010. b. Calculate the AMT preference for depreciation in 2010 if Dorothy purchased the building in 1986. 15
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94. Lavender, Inc., incurs research and experimental expenditures of $210,000 in 2010. Determine the amount of the AMT adjustment for 2010 and for 2011 if for regular income tax purposes: a. Lavender expenses the research and experimental expenses. b. Lavender capitalizes the research and experimental expenses and elects to amortize them over a 10-year period. 95. In May 2009, Egret, Inc. issues options to Andrea, a corporate officer, to purchase 200 shares of Egret stock under an ISO plan. At the date the stock options are issued, the fair market value of the stock is $900 per share and the option price is $1,200 per share. The stock becomes freely transferable in 2010. Andrea exercises the options in November 2009 when the stock is selling for $1,600 per share. She sells the stock in December 2011 for $1,800 per share.
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  • Spring '12
  • honig
  • Taxation in the United States, regular income tax

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