Wallace Owns a Construction Company That Builds Both Commercial and Residential

question 117

Multiple Choice

Wallace owns a construction company that builds both commercial and residential buildings. He contracts to build a residential building for $800,000 for which he is eligible to use the completed contract method of accounting. In the current year for regular income tax purposes, Wallace does not recognize any income on the contract. Under the percentage of completion method, the income recognized under the contract would have been $60,000. Wallace's AMT adjustment is:

• A) $0.
• B) $60,000 negative adjustment.
• C) $60,000 positive adjustment.
• D) $800,000 positive adjustment.
• E) None of the above.

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Definitions:

Neurotic Disorders

Mental disorders characterized by anxiety, depression, or other feelings of distress that are not due to psychosis.

Somatoform Disorders

A group of psychological disorders in which patients experience physical symptoms that are incongruent with or can't be fully explained by any underlying medical or neurological condition.

Psychotic Disorders

A group of mental health conditions that affect the mind, causing impaired thought and emotions, which lead to a detachment from reality.

Mood Disorders

A category of mental health issues that primarily affect a person's emotional state, including depression and bipolar disorder.