Question 1

Dale owns and operates Dale's Emporium as a sole proprietorship.On January 30,1998,Dale's Emporium acquired a warehouse for $100,000.For regular income tax purposes in 2015,depreciation was deducted under MACRS using a rate of 2.564%.Determine the AMT adjustment for depreciation and indicate whether it is positive or negative.

Accepted Answer

A)   $64 negative adjustment.
B)   $64 positive adjustment.
C)   No adjustment is required because Dale's Emporium used the Alternative Depreciation System (ADS) to compute depreciation on the property for AMT purposes.
D)   No adjustment is required because Dale's Emporium used MACRS to compute the depreciation of the property for regular income tax purposes.
E)   None of the above.F) C) and D)
G) A) and B)

Question 2

Which of the following correctly describes the tax credit for rehabilitation expenditures?

Accepted Answer

A)   The cost of enlarging any existing business building is a qualifying expenditure.
B)   The cost of facilities related to the building (e.g. ,a parking lot) is a qualifying expenditure.
C)   No recapture provisions apply.
D)   No credit is allowed for the rehabilitation of personal use property.
E)   None of the above.F) B) and C)
G) C) and E)

Question 3

In 2015,Glenn had a $108,000 loss on a passive activity.None of the loss is attributable to AMT adjustments or preferences.She has no other passive activities.Which of the following statements is correct?

Accepted Answer

A)   In 2015,Glenn can deduct $108,000 for regular income tax purposes and for AMT purposes.
B)   Glenn will have a $108,000 tax preference in 2015 as a result of the passive activity.
C)   For regular income tax purposes,none of the loss is allowed in 2015.
D)   In 2015,Glenn will have a positive adjustment of $25,000 as a result of the passive loss.
E)   None of the above.F) A) and C)
G) A) and E)

Question 4

Roger is considering making a $6,000 investment in a venture that its promoter promises will generate immediate tax benefits for him.Roger,who does not anticipate itemizing his deductions,is in the 30% marginal income tax bracket.If the investment is of a type that produces a tax credit of 40% of the amount of the expenditure,by how much will Roger's tax liability decline because of the investment?

Accepted Answer

A)   $0
B)   $1,800
C)   $2,200
D)   $2,400
E)   None of the aboveF) C) and E)
G) A) and B)

Question 5

All taxpayers are eligible to take the basic research credit.

Accepted Answer

A) True 
 B)False

Exam 17: Business Tax Credits and Corporate Alternative Minimum Tax

In 2015,Glenn had a $108,000 loss on a passive activity.None of the loss is attributable to AMT adjustments or preferences.She has no other passive activities.Which of the following statements is correct?

Correct Answer
verified

Correct Answer
verified

All taxpayers are eligible to take the basic research credit.

Correct Answer
verified

Which of the following correctly describes the tax credit for rehabilitation expenditures?

Correct Answer
verified

Correct Answer
verified

Exam 17: Business Tax Credits and Corporate Alternative Minimum Tax

In 2015,Glenn had a $108,000 loss on a passive activity.None of the loss is attributable to AMT adjustments or preferences.She has no other passive activities.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

All taxpayers are eligible to take the basic research credit.

Correct AnswerverifiedShow Answer

Which of the following correctly describes the tax credit for rehabilitation expenditures?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified