Jesse placed equipment that cost $48,000 in service in 2015 (neither § 179 expensing nor bonus depreciation was elected).On July 1,2017,Jesse sold the equipment for $22,000.

Regular tax and AMT depreciation amounts for the equipment are computed as follows.

What AMT adjustments will be required for the equipment for 2017?

A)$5,844 positive adjustment depreciation; $1,292 positive adjustment equipment sale
B)$324 positive adjustment depreciation; $(5,844) negative adjustment equipment sale
C)$648 positive adjustment depreciation; $(2,276) negative adjustment equipment sale
D)$324 positive adjustment depreciation; $0 adjustment for the equipment sale

Question

​Jesse placed equipment that cost $48,000 in service in 2015 (neither § 179 expensing nor bonus depreciation was elected).On July 1,2017,Jesse sold the equipment for $22,000.
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Regular tax and AMT depreciation amounts for the equipment are computed as follows.
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What AMT adjustments will be required for the equipment for 2017?
​
A)​$5,844 positive adjustment depreciation; $1,292 positive adjustment equipment sale 
B)​$324 positive adjustment depreciation; $(5,844) negative adjustment equipment sale 
C)$648 positive adjustment depreciation; $(2,276) negative adjustment equipment sale 
D)​$324 positive adjustment depreciation; $0 adjustment for the equipment sale

Quizplus · Accepted Answer

To calculate the AMT adjustments for the equipment for 2017, we need to compare the regular tax and AMT depreciation amounts and take the difference, as well as calculate the AMT adjustments for the equipment sale.

For depreciation:
Regular tax depreciation for 2017 = $9,600
AMT depreciation for 2017 = $7,776

The difference is a positive adjustment of $1,824 ($9,600 - $7,776).

For equipment sale:
The equipment was sold for $22,000, which is less than the adjusted basis of $19,200 ($48,000 - $9,600 - $19,200).
The AMT adjustment for the equipment sale is the difference between the sale price and the adjusted basis, which is a positive adjustment of $2,276 ($22,000 - $19,200).

Therefore, the correct answer is B.

​Jesse Placed Equipment That Cost $48,000 in Service in 2015

Jesse Placed Equipment That Cost $48,000 in Service in 2015