Lilly Is Single and Reports Zero Taxable Income for 2019

question 71

Essay

Lilly is single and reports zero taxable income for 2019.She incurs positive AMT timing adjustments of $600,000 and
AMT preferences of $200,000.
a.Calculate Lilly's tentative minimum tax (TMT).
b.Calculate Lilly's AMT credit carryover to 2020.

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Definitions:

Perfectly Elastic

Perfectly elastic describes a situation in market demand where consumers will only buy at one price and any deviation from this price leads to zero demand for the good or service.

Economic Profits

The difference between a firm’s total revenue and its total costs, including both explicit and implicit costs.

Exiting

The process of leaving or withdrawing from a particular situation, status, or location, often used in the context of businesses or markets.

Perfectly Competitive Market

A market structure characterized by infinite buyers and sellers, freedom of entry and exit, and perfect information, where no single entity can influence the market price.