Jonathan Is Married,files a Joint Return,and Has One Child

question 5

Multiple Choice

Jonathan is married,files a joint return,and has one child.During 2014,Jonathan has $85,000 of taxable income.He has $20,000 of positive AMT adjustments and $28,000 of tax preferences.Since Jonathan rents his home (pays no mortgage interest) and lives in Tennessee (has no state income tax) ,he does not itemize his deductions but takes the standard deduction.Calculate Jonathan's AMTI (before exclusion amount) .

• A) $133,500.
• B) $144,850.
• C) $145,400.
• D) $157,250.

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Definitions:

Direct Method

A cash flow statement preparation approach that involves reporting major classes of gross cash receipts and payments.

Operating Cash Flows

Cash generated from the primary activities of a business, including revenue from sales of goods and services.

Presentation Method

The way financial information is displayed and organized in financial statements or reports.

Financing Activities

Activities that result in changes in the size and composition of the contributed equity and borrowings of the entity.