1) The alternative minimum tax is the
excess of the tentative minimum tax amount over the regular tax amount.
2) Corporations cannot use the installment
method in calculating alternative minimum taxable income (AMTI) for
3) The NOL deduction is calculated the
same for regular and alternative minimum tax purposes.
4) The ACE adjustment always increases
alternative minimum taxable income (AMTI).
5) Life insurance proceeds are a positive
adjustment for adjusted current earnings (ACE), but not alternative minimum
taxable income (AMTI).
6) All corporations, except S corporations
and small C corporations, must calculate the ACE adjustment.
7) The minimum tax credit available for a
corporation’s alternative minimum tax liability can be carried forward
indefinitely and offsets regular tax liabilities in future years.
8) The general business credit can be used
to offset the alternative minimum tax.
9) Wind Corporation is a personal holding
company. Its taxable income for this year is $100,000. The corporation’s charitable
contributions are $5,000 greater than its income tax charitable contribution
deduction limitation. Wind’s UPHCI is $95,000, assuming no other adjustments
must be made.
10) A corporation can be subject to both
the accumulated earnings tax and the personal holding company tax in the same
11) To avoid the accumulated earnings tax,
a corporation needs to have a definite plan for expending the accumulated