A, B and C Are Each Single, Report Wage Income

question 4

Multiple Choice

A, B and C are each single, report wage income of $135,000, and take the standard deduction. The following additional information is provided about each taxpayer. A: Resides in New York. $45,000 interest income from Treasury bonds. B: Resides in Nevada. $45,000 capital gain from the sale of stock.
C: Resides in Florida. $45,000 interest income from private-activity municipal bonds.
All else being equal and taking into consideration the principles underlying the AMT, which of these taxpayers has the highest likelihood of being subject to the AMT in the current tax year?

• A) Taxpayer A.
• B) Taxpayer B.
• C) Taxpayer C.
• D) All three taxpayers are equally likely to be in AMT.

---

Definitions:

Off-Peak Pricing

Charging different prices during different times of the day or during different days of the week to reflect variations in demand for the service.

Demand

The willingness and eagerness of a consumer to purchase a particular product or service at a certain price.

Idle Production Capacity

Refers to the part of a manufacturing plant that is not being used to its full potential to produce goods.

Tax Accountants

Professionals who specialize in preparing tax returns for individuals and businesses, offering advice on tax planning and compliance with tax laws.