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Flashcards in Corporation Taxation - AMT Deck (19):
1

The starting point of computing a corporations AMTI is ____

It's regular taxable income

2

Regular taxable income is ______ by tax preferences and ______ by specified adjustments

Increased

Increased/Decreased

3

T/F

One tax preference that must be added to a corporation's regular taxable income is the amount of tax-exempt interest from private activity bonds

TRUE

4

One adjustment that must be made to convert regular taxable income to AMTI is the adjustment for depreciation on personal business property placed in service after _____

1986

5

For AMT purposes, depreciation on 5-year property must be computed using the _____ declining balance method

150%

6

Because for AMT purposes, depreciation on 5-year property must be computed using the 150% declining balance method, a corporation that uses the 200% declining balance method will have depreciated more for regular tax purposes than what is allowed for AMT purposes. What does this mean?

The additional depreciation over what AMT allows will have to be added back to regular taxable income to arrive at AMTI.

7

If a corporation's tentative minimum tax exceeds the regular tax, the excess amount is ______

Payable in addition to the regular tax

8

T/F

A corporation's tax preference items that must be taken into account for AMT purposes includes use of the percentage-of-completion method of accounting for long-term contracts

FALSE

It is the excess of income under the percentage-of-completion method over the amount reported using the completed-contract method that is a positive adjustment in computing AMT

9

T/F

A corporation's tax preference items that must be taken into account for AMT purposes includes casualty losses

FALSE

A deduction for casualty losses is allowed in the computation of AMT

10

T/F

A corporation's tax preference items that must be taken into account for AMT purposes includes tax-exempt interest on private activity bonds issued in 2008

TRUE

Note that tax-exempt interest on private activity bonds issued in 2009 and 2010 is not a tax preference item.

11

T/F

A corporation's tax preference items that must be taken into account for AMT purposes includes capital gains

FALSE

Capital gains are not a preference item in computing AMT.

12

T/F

In computing AMT, a corporation must include as an adjustment the dividends received deduction

FALSE

This is neither an adjustment nor a tax preference item for AMT

13

T/F

In computing AMT, a corporation must include as an adjustment the difference between regular tax depreciation and straight-line depreciation over 40 years for real property placed in service in 1998

TRUE

For real property placed in service before January 1, 1999, an AMT adjustment is necessary because for AMT purposes, real property must be depreciated using the straight-line method over a 40-year recovery period, rather than the 39-year or 27 & 1/2-year recovery period used for regular tax purposes.

14

T/F

In computing AMT, a corporation must include as an adjustment charitable contributions

FALSE

This is neither an adjustment nor a tax preference item for AMT

15

T/F

In computing AMT, a corporation must include as an adjustment interest expense on investment property

FALSE

This is neither an adjustment nor a tax preference item for AMT

16

A corporation will not be subject to AMT if ___

It is the corporation's First Tax Year

17

After the first year, a corporation is exempt from AMT for each year that it passes a gross receipts test. A corporation will be exempt for its second year if its gross receipts for the first year did not exceed ____. For all subsequent years, a corporation is exempt f its average annual gross receipts for the testing period do not exceed _____

$5M

$7.5M

18

T/F

Exemption from AMT is based on asset size

FALSE

19

T/F

Exemption from AMT is based on number of shareholders

FALSE