Kay Claimed Percentage Depletion of $119,000 for the Current Year

question 56

True/False

Kay claimed percentage depletion of $119,000 for the current year for regular income tax purposes.Cost depletion would have been $60,000.Her basis in the property was $90,000 at the beginning of the current year.Kay must treat the percentage depletion deducted in excess of cost depletion, or $59,000, as a preference in computing AMTI.

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Definitions:

Digital Cash

Money stored electronically and used in place of physical currency.

Electronic Funds

Money that is moved electronically from one bank account to another.

Microchips

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Electronic Fund Transfer Act

A law that protects consumers when they transfer funds electronically, including ATMs, debit cards, and direct deposits.