Prior to the effect of tax credits eunices regular

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61. Prior to the effect of tax credits, Eunice’s regular income tax liability is $200,000 and her tentative AMT is $190,000. Eunice has general business credits available of $12,500. Calculate Eunice’s tax liability after tax credits. A. $200,000. B. $190,000. C. $187,500. D. $177,500. E. None of the above. 62. Which of the following normally produces positive AMT adjustments? a., b., and c. are correct. 7
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63. On January 3, 1997, White Corporation acquired an office building for $100,000 and claimed MACRS depreciation of 2.461%. The Alternative Depreciation System rate for the first recovery year is 2.396%. What was White’s AMT adjustment (or preference) for depreciation with respect to the office building in 1997? 64. Omar acquires used 7-year personal property for $100,000 to use in his business in February 2010. Omar does not elect § 179 expensing, but does take the maximum regular cost recovery deduction. As a result, Omar will have a positive AMT adjustment in 2010 of what amount? 65. In 2010, Ray incurs $60,000 of mining exploration expenditures, and deducts the entire amount for regular income tax purposes. Which of the following statements is incorrect ? A. For AMT purposes, Ray will have a positive adjustment of $54,000 in 2010. B. Ray will have a negative AMT adjustment of $6,000 in 2015. C. Over a 10-year period, positive and negative adjustments will net to zero. D. The AMT adjustment for mining exploration expenditures cannot be avoided if the taxpayer elects to write the expenditures off over a 10-year period. E. All of the above are correct. 66. Wallace owns a construction company that builds both commercial and residential buildings. He contracts to build a residential building for $800,000 for which he is eligible to use the completed contract method of accounting. In the current year for regular income tax purposes, Wallace does not recognize any income on the contract. Under the percentage of complete method, the income recognized under the contract would have been $60,000. Wallace’s AMT adjustment is: 67. Tad is a vice-president of Ruby Corporation. In 2010, he acquired 1,000 shares of Ruby Corporation stock under the corporation’s incentive stock option (ISO) plan for an option price of $43 per share. At the date of exercise in 2010, the fair market value of the stock was $65 per share. The stock became freely transferable in 2011. Tad sold the 1,000 shares for $69 per share in 2012. Which of the following statements is incorrect?
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  • Spring '12
  • honig
  • Taxation in the United States, regular income tax

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