An Example of a Tax Preference Item That Must Be

question 13

Multiple Choice

An example of a tax preference item that must be added to taxable income when computing AMTI would be:

• A) Percentage depletion in excess of the adjusted basis in property
• B) Excess intangible drilling costs
• C) Tax-exempt interest on certain private activity bonds
• D) Only a and b
• E) All of the above

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Definitions:

Production Possibilities

A curve or frontier that shows the maximum combinations of goods or services that can be produced with a given set of resources and technology.

Marginal Product

The additional output that is produced by using one more unit of a factor of production, while holding other factors constant.

Customers Served

The number of individual clients or consumer accounts that a business has provided with goods or services.

Capital Costs

Expenses incurred in acquiring or upgrading physical assets such as buildings and machinery.