Vicki Owns and Operates a News Agency (As a Sole

question 89

Multiple Choice

Vicki owns and operates a news agency (as a sole proprietorship) .During 2016,she incurred expenses of $24,000 to increase circulation of newspapers and magazines that her agency distributes.For regular income tax purposes,she elected to expense the $24,000 in 2016.In addition,Vicki incurred $15,000 in circulation expenditures in 2017 and again elected expense treatment.What AMT adjustments will be required in 2016 and 2017 as a result of the circulation expenditures?

• A)$16,000 positive in 2016,$2,000 positive in 2017.
• B)$16,000 negative in 2016,$2,000 positive in 2017.
• C)$16,000 negative in 2016,$10,000 positive in 2017.
• D)$16,000 positive in 2016,$10,000 positive in 2017.
• E)None of the above.

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Definitions:

Contingency

A future event or circumstance that is possible but cannot be predicted with certainty.

Employee Earnings Record

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