Chapter 15 T/F Flashcards
Theft and casualty losses are not tax-preference items for purposes of the AMT.
True
When computing the AMT, the standard deduction must be added back to taxable income by taxpayers who use it for regular tax purposes.
True
Charitable contributions are generally allowable as itemized deductions in determining the AMT.
True
Medical expenses in excess of 7.5 percent of adjusted gross income are allowable in computing the AMT.
False. The medical expense deduction floor for AMT purposes is 10 percent
Certain interest expenses are deductible in computing AMTI.
True
Interest on nongovernmental purpose bonds issued after August 7, 1986, is generally a tax-preference item for purposes of the AMT.
True
The exemption amount for purposes of calculating the AMT increases at higher income levels.
False. The exemption amount for purposes of calculating the AMT is a flat amount that is gradually phased out (reduced) above specified levels of AMTI.
The AMT rate for individual taxpayers is 20 percent.
False. The AMT rates for individual taxpayers are 26 and 28 percent
The AMT rate is the same for both individuals and corporations.The AMT rate is the same for both individuals and corporations.
False. The individual rates are 26 and 28 percent, while the corporate rate is 20 percent.
A “small corporation” that is exempt from the AMT will later lose its exemption if its 3-year average gross receipts exceed $5 million.
False. A corporation will lose its existing AMT exemption if its 3-year average gross receipts exceed $7.5 million.
The ACE preference may subject corporations to the AMT on items that are not included in gross income for purposes of the regular income tax
True
C corporations may be subject to the AMT as a result of receiving life insurance proceeds.
True
