On January 3, 1998, Parrot Corporation Acquired an Office Building

question 41

Multiple Choice

On January 3, 1998, Parrot Corporation acquired an office building for $300,000 and computed depreciation under ADS (Alternative Depreciation System) for regular income tax purposes. The ADS rate for the first year is 2.396% and for the fifteenth year is 2.50% (MACRS rates would have been 2.461% and 2.564% respectively) . What is Parrot's AMT adjustment (or preference) for depreciation with respect to the office building for 1998 and for 2012?

• A)$195 positive adjustment in 1998 and $192 positive adjustment in 2012.
• B)$195 positive adjustment in both 1998 and 2012.
• C)$195 negative adjustment in 1998 and $195 negative adjustment in 2012.
• D)$0 adjustment or preference.
• E)None of the above.

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