Question: In 2016, AutoUSA Inc. received $4,600,000 of book income, including $20,000 of interest income from tax-exempt municipal bonds for a private activity in 2009. Depreciation for Financial accounting 50,000, but AucioUSA uses MACRS for tax so the depreciation is 80,000 for Regular tax, 60,000 is the depreciation for Alternative minimum tax, and 50,000 for ACE. AutoUSA reported $3,600,000 of regular business expenses, and 500,000 of Meals and Entertainment, for Financial purposes. Additionally, there was $100,000 of life insurance proceeds collected in the current year, and 5,000 of life insurance premiums were also paid in the current year. What is its tax due when it files its return, assuming no payments were made throughout the year? (ignore the estimated tax penalty for this problem) Assume AutoUSA pays taxes at a flat 34 percent rate for regular tax purposes.
Be certain you clearly identify the following amounts and show calculation of how you got the answers:
What is the taxable income and Reg. tax liability?
What is the AMTI(you must tell me the amt of the ACE adjustment and whether it is positive or negative)?
What is the AMT base?
What is the Tentative Minimum tax?
What is the Alternative Minimum tax?
What is the Total Tax liability?