Wallace Owns a Construction Company That Builds Both Commercial and Residential

question 76

Multiple Choice

Wallace owns a construction company that builds both commercial and residential buildings.He contracts to build a residential building for $800,000 for which he is eligible to use the completed contract method of accounting.In the current year for regular income tax purposes,Wallace does not recognize any income on the contract.Under the percentage of completion method,the income recognized under the contract would have been $60,000.Wallace's AMT adjustment is:

• A)$0.
• B)$60,000 negative adjustment.
• C)$60,000 positive adjustment.
• D)$800,000 positive adjustment.
• E)None of the above.

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Definitions:

Scatter Chart

A type of graph used in statistics to display values for two variables for a set of data, showing the relationship between them.

Stock Chart

A graphical representation of a stock's price movements over a period of time.

Surface Chart

A graphical representation of three-dimensional data where the color and patterns of the surface vary according to the values being plotted.

House Size

A measurement generally referring to the total living area or square footage of a residential building.