The Prasad Trust Incurred the Following Items for 2014 Compute Prasad's Tentative Minimum Tax for the Year

question 115

Essay

The Prasad Trust incurred the following items for 2014.
$\begin{array}{lr}\text { Taxable interest income } & \$ 50,000 \\\text { Tax-exempt interest income, not on private activity bonds } & 25,000 \\\text { Tax-exempt interest income, on private activity bonds } & 5,000\end{array}$

Compute Prasad's tentative minimum tax for the year. Prasad does not hold any credits available to reduce the AMT liability.
$\begin{array}{lc}\text { AMT income }(\$ 50,000+\$ 5,000) & \$ 55,000 \\\text { AMT exemption } & \underline{(23,500)} \\\text { AMT tax base } & \$ 31,500 \\\text { Tentative minimum tax }(\$ 31,500 \times .26)& \$ 8,190\end{array}$
$\begin{array}{lc}\text { AMT income }(\$ 50,000+\$ 5,000) & \$ 55,000 \\\text { AMT exemption } & \underline{(23,500)} \\\text { AMT tax base } & \$ 31,500 \\\text { Tentative minimum tax }(\$ 31,500 \times .26)& \$ 8,190\end{array}$

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