2) The alternative minimum tax (AMT) is computed as follows: a. Excess of the te

Question

2) The alternative minimum tax (AMT) is computed as follows:

a. Excess of the tentative AMT over the regular tax.

b. The tentative AMT plus the regular tax.

c. Lesser of the tentative AMT or the regular tax

d. Excess of the regular tax over the tentative AMT

3) Which of the following may not be deducted in the computation of alternative minimum tax of an individual? a. Traditional IRA account contribution

b. Charitable contributions

c. Personal exemptions

d. One-half of the self-employment tax deduction

4) Martin, a calendar-year individual, files a Year 1 tax return on March 31, Year 2. Martin reports $20,000 of gross income. Martin inadvertently omits $500 of interest income. The IRS may assess additional tax up until which of the following dates?

a. March 31, Year 8

b. April 15, Year 8

c. April 15, Year 5

d. March 31, Year 5

Explanation / Answer

2 Choice "a" is correct.  The alternative minimum tax (AMT) is computed as the excess of tentative AMT

over the regular tax.

3 Choice is C Personal Exemption

4 Choice "c" is correct.  Generally, the statute of limitations on assessments is three years from the later of

the due date of the return or the date the return was filed (including amended returns).  The IRS has up to

six years to assess additional tax if the misstatement is an understatement of 25% or more of gross

income.  In this case, the misstatement is $500 on $20,000 of gross income, or 2.5%.  Therefore, the

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