On February 1, 2017, Omar Acquires Used 7-Year Personal Property

question 8

Multiple Choice

On February 1, 2017, Omar acquires used 7-year personal property for $100,000 for use in his business. Omar does not elect § 179 expensing, but he does take the maximum regular cost recovery deduction. As a result, Omar incurs a positive AMT adjustment in 2017 of what amount?

• A)$0
• B)$3,580
• C)$10,710
• D)$14,290
• E)None of the above

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Definitions:

Commercial Substance

A concept in accounting that signifies a transaction causes a change in the future cash flows that is significant to a business.

Asset Turnover

A financial ratio that measures the efficiency of a company in using its assets to generate sales or revenue.

Net Sales

The net income generated from sales after deducting returns, allowances, and discounts.

Total Assets

The combined value of all owned resources and property by an entity that has economic value.