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:

Capital Structure

Refers to the mix of debt and equity financing a company uses to fund its operations and growth.

WACC

The Weighted Average Cost of Capital, a calculation of a firm's cost of capital that weighs each category of capital proportionately.

After Taxes

The net amount remaining following the deduction of all applicable taxes, often used to assess the true profitability of a business activity or investment after federal, state, and other taxes have been considered.

Beta Coefficient

A gauge for assessing the risk or fluctuation level of a security or portfolio in relation to the entire market.