The Computation of the Alternative Minimum Tax Base Begins with Regular

question 13

Multiple Choice

The computation of the alternative minimum tax base begins with regular taxable income.Which of the following is not part of the formula for computing the alternative minimum tax base?

• A) Subtract personal exemptions.
• B) Add the standard deduction amount if used for regular tax.
• C) Subtract the AMT exemption amount (if any).
• D) Add back tax exempt interest from a private activity bond not issued in 2009 or 2010.

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Definitions:

Fixed Costs

Expenses that do not vary with the level of production or sales volumes, such as rent, salaries, and insurance premiums.

Operating Leverage

Operating leverage is a measure of how revenue growth translates into growth in operating income, indicating the proportion of fixed versus variable costs a company has.

Pretax Income

Income earned by a company before taxes are deducted, indicating the profitability of a company's core operations.

Sales Increase

The rise in the amount of products or services sold by a company, usually compared to a previous period.