Celia and Christian, Who Are Married Filing Jointly, Have One

question 113

Multiple Choice

Celia and Christian, who are married filing jointly, have one dependent and do not itemize deductions. They have taxable income of $82,000 and tax preferences of $53,000 in 2014. What is their AMT base for 2014?

• A) $0.
• B) $77,838.
• C) $94,450.
• D) $150,250.
• E) None of the above.

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Definitions:

Audit Procedures

Actions taken by auditors to obtain evidence and evaluate its relevance and reliability in order to form their opinion on financial statements.

Factors With Recourse

A provision in factoring transactions where the seller must cover the costs of any uncollected receivables sold to the factor.

Prevailing Borrowing Rate

The current interest rate that lenders are charging borrowers, often influenced by central bank rates and market conditions.

Imputed Interest

The theoretical interest deducted or accrued on obligations not explicitly stating an interest rate, used for tax and accounting purposes to reflect the true cost or value of the financial instruments.