Which of the Following Items Is Not Added Back to Regular

question 86

Multiple Choice

Which of the following items is not added back to regular taxable income in computing alternative minimum taxable income?

• A)Home mortgage interest expense
• B)Real property taxes
• C)Tax-exempt interest from a private activity bond issued in 2007
• D)State income taxes

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Definitions:

Direct Write-off Method

A method used in accounting to write off bad debts when they are determined to be uncollectible, impacting accounts receivable and expense accounts directly.

Recovery of Bad Debt

The process of collecting funds previously written off as uncollectible, generally resulting in an income statement gain the period it's recovered.

Percent of Sales Method

A financial forecasting approach that estimates future financial statements' items as a percentage of projected sales.

Allowance Method

An accounting technique that estimates and accounts for bad debts as an expense before they are actually confirmed as uncollectible.