Which of the Following Statements Concerning the Individual Alternative Minimum

question 67

Multiple Choice

Which of the following statements concerning the individual alternative minimum tax (AMT) is true?

• A) The calculation of alternative minimum taxable income begins with taxable income for regular tax purposes.
• B) A taxpayer with no tax preference items for the year can't be liable for AMT.
• C) The standard deduction is not an AMT adjustment in calculating AMTI.
• D) The individual AMT rate is a flat 28%.

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Definitions:

Depreciable Cost

The total cost of a fixed asset that is allocated to depreciation expense over the asset's useful life, calculated as the asset's cost minus its salvage value.

Straight-Line Rate

A method of calculating depreciation of an asset, which assumes the asset will lose an equal amount of value each year over its useful life.

Annual Straight-Line Depreciation

A method of calculating the depreciation of an asset, spreading its cost evenly over its useful life.

Straight-Line Depreciation Rate

A method of calculating the depreciation of an asset, where the asset's cost is evenly distributed over its useful life.