Identify which of the following statements is true.
A)The corporate alternative minimum tax rate is 35%.
B)AMT is a permanent increase to the corporate tax liability.
C)Small corporations whose average gross receipts for each of the three preceding years are $7.5 million or less are exempted from the AMT.
D)The excess of tax depreciation over book depreciation increases AMTI.

Question

Quizplus · Accepted Answer

C)Small corporations are exempt from AMT.The corporate AMT rate is 20%.If AMT is due,it will generate a credit that can be used in the future when the corporation's regular tax exceeds the TMT,so it is essentially a prepayment of tax,not a permanent increase.The adjustment for depreciation is based on the difference between regular tax depreciation (MACRS)and AMT depreciation.

Identify Which of the Following Statements Is True