Which of the Following Statements About the Alternative Minimum Tax

question 73

Multiple Choice

Which of the following statements about the alternative minimum tax depreciation rules is correct?

• A)The MACRS depreciation rules are used to calculate the depreciation deduction when calculating alternative minimum taxable income regardless of the date the property was placed in service.
• B)The excess of the gain reported on the disposition of tangible personal property for income tax purposes over the gain reported for alternative minimum tax purposes is a positive adjustment to taxable income in arriving at alternative minimum taxable income.
• C)A 31.5-year recovery period is used when calculating the commercial real property depreciation deduction for alternative minimum taxable income purposes.
• D)No depreciation adjustment is made when computing AMT for real property acquired after 1998.

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Definitions:

Economic Profits

The margin between an organization's complete earnings and its aggregate expenditures, covering both visible and hidden costs.

Implicit Costs

Implicit costs are the opportunity costs of using resources owned by the business for production instead of lending, selling, or renting them out.

Accounting Profits

The net income for a company determined by subtracting total expenses from total revenues, according to generally accepted accounting principles (GAAP).

Short Run

A period of time during which at least one factor of production is fixed, usually considered in economic models and analyses.