Assignment Question

1. The alternative minimum tax is the excess of the tentative minimum tax amount over the regular tax amount.

True
False

2. 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.

True
False

3. The Small C corporation exemption from AMT continues as long as average gross receipts for the three preceding tax years are

A. $6.5 million or less.
B. $7.5 million or less.
C. $8.0 million or less.
D. $7.0 million or less.

4. Identify which of the following statements is true.

A. Tax preference items always increase alternative minimum taxable income.
B. No credits are allowed when computing the tentative minimum tax.
C. The corporate alternative minimum tax rate is 35%.
D. All of the above are false.

5. Which of the following statements regarding the minimum tax credit is correct?

A. Taxpayers may elect to forgo the carryback period and carry the credit forward.
B. It must be carried back before being carried forward.
C. It can only be carried forward.
D. There are not carryforwards or carrybacks of the minimum tax credit.

6. Determine whether the following statements relating to the AMT for a corporation are true or false. If false, explain why.

a. Tax preference items only increase AMTI.
b. A corporation uses the same NOL carryover amount for regular tax and AMT purposes.
c. A corporation is allowed a tax credit for the excess of its AMT over its regular tax.
d. The general business credit can reduce a corporation's regular tax and also its AMT.
e. The ACE adjustment only increases AMTI.
f. An S corporation is exempt from the AMT, regardless of its gross receipts.

7. (Select whether the statement is true or false. If the statement is true, leave the explanation column blank. If the statement is false, select the correct  explanation. Abbreviation used: min. = minimum.)