Which of the Following Statements Regarding AMT Is True

question 15

Multiple Choice

Which of the following statements regarding AMT is true?

• A) Only very profitable companies (AMTI greater than $1 million) have their AMT exemption phased out.
• B) The AMT exemption is phased out dollar for dollar as AMTI increases.
• C) Minimum tax credits are generated whenever regular tax liability exceeds tentative minimum tax.
• D) Minimum tax credits can be carried forward indefinitely.

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Definitions:

Dividends Paid

Distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.

Cost of Sales

Direct costs attributable to the production of the goods sold by a company, including material and labor costs.

Inventories

The complete list of items such as property, goods in stock, or the contents of a building.

Accounts Payable

The amounts due by a company to its suppliers or creditors for goods and services received but not yet paid for.