When Computing a Corporation's Alternative Minimum Taxable Income,its Taxable Income

question 119

Multiple Choice

When computing a corporation's alternative minimum taxable income,its taxable income is

• A)increased by tax preference items.No decreases are allowed for preferences.
• B)increased by adjustments.No decreases are allowed for adjustments.
• C)increased by the statutory exemption of $40,000.
• D)increased by 75% of the excess of adjusted current earnings over taxable income.

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Definitions:

Capital

Refers to financial assets or the financial value of assets, such as funds held in deposit accounts and resources used for production.

Amortization Payment

A periodic payment which includes both interest and principal, used to pay off debt over a certain period of time.

Average Fixed Cost

The fixed cost per unit of output, which decreases as the quantity of output increases.

Average Total Cost

The total cost of production divided by the quantity of output produced, encompassing both fixed and variable costs.