Dale Owns and Operates Dale's Emporium as a Sole Proprietorship

question 113

Multiple Choice

Dale owns and operates Dale's Emporium as a sole proprietorship. On January 30, 2003, Dale's Emporium acquired a warehouse for $100,000. For regular income tax purposes in 2017, depreciation was deducted under MACRS using a 2.564% rate. Determine the AMT adjustment for depreciation and indicate whether it is positive or negative.

• A)$64 negative adjustment.
• B)$64 positive adjustment.
• C)No adjustment is required because Dale's Emporium used the Alternative Depreciation System (ADS) to compute depreciation on the property for AMT purposes.
• D)No adjustment is required because Dale's Emporium used MACRS to compute the depreciation of the property for regular income tax purposes.

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