Chapter 12: True/False ACC 4301 Question 1 For personal property placed in servi

Question

Chapter 12: True/False ACC 4301

Question 1

For personal property placed in service in 2015, if a taxpayer elects to use the 150 percent declining-balance method for regular income tax MACRS depreciation, there will be no AMT adjustment for depreciation.

True

False

Question 2

In general, for long-term contracts, taxpayers are required to use the percentage of completion method for AMT purposes.

True

False

Question 3

For 2015, the maximum rate for the individual alternative minimum tax is 28 percent.

True

False

Question 4

A taxpayer can avoid the AMT adjustments for circulation expenditures by electing to write off the expenditures over a five-year period for regular income tax purposes.

True

False

Question 5

In the individual AMT calculation, medical expenses are deductible to the extent they exceed 7.5 percent of AGI for all taxpayers.

True

False

Question 6

The alternative minimum tax is beneficial to most high-income individual taxpayers.

True

False

Question 7

Interest expense incurred by individuals is fully deductible for AMT purposes.

True

False

Question 8

Excess intangible drilling costs greater than 50 percent of net income from oil, gas, and geothermal properties is an AMT preference.

True

False

Question 9

An individual's regular tax liability may be reduced by a tax credit for prior years' minimum tax liability attributable to timing differences.

True

False

Question 10

The ACE adjustment may be either positive or negative.

True

False

Question 11

The corporate AMT tax rate is 25 percent.

True

False

Question 12

Circulation expenditures are not deductible for AMT purposes.

True

False

Question 13

Any tax-exempt interest earned by an individual taxpayer is a tax preference item.

True

False

Question 14

The alternative minimum tax liability is equal to the tentative minimum tax less the regular tax liability.

True

False

Question 15

The corporate AMT exemption is reduced by 25 percent of the excess of AMTI over $100,000.

True

False

Question 16

The AMT exemption is reduced 25 cents on the dollar for AMTI above specified income amounts.

True

False

Question 17

Both adjustments and preference items can either increase or decrease taxable income in arriving at AMTI.

True

False

Question 18

Certain nonrefundable personal tax credits can offset both the regular income tax and the AMT in full.

True

False

Question 19

Losses from passive activities are not deductible in computing either the regular income tax or the AMT.

True

False

Question 20

For real property placed in service after 1998, there is no AMT adjustment for depreciation.

True

False

Question 21

Casualty losses are allowed in calculating an individual’s alternative minimum taxable income (AMTI).

True

False

Question 22

Qualified housing interest is deductible in calculating the alternative minimum taxable income (AMTI).

True

False

Question 23

The standard deduction is allowed in computing alternative minimum taxable income (AMTI) for individual taxpayers.

True

False

Question 24

The alternative tax net operating loss deduction cannot offset more than 90 percent of alternative minimum taxable income.

True

False

Explanation / Answer

Question 1

False

Question 2

True

Question 3

True

Question 4

True

Question 5

True

Question 6

False

Question 7

False

Question 8

True

Question 9

True

Question 10

True

Question 11

True

Question 12

False

Question 13

True

Question 14

False

Question 15

False

Question 16

True

Question 17

False

Question 18

True

Question 19

False

Question 20

False

Question 21

True

Question 22

True

Question 23

True

Question 24

False

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