In 2012, Sean Incurs $90,000 of Mining Exploration Expenditures, and Deducts

question 6

Multiple Choice

In 2012, Sean incurs $90,000 of mining exploration expenditures, and deducts the entire amount for regular income tax purposes.Which of the following statements is correct?

• A)For AMT purposes, Sean will have a positive adjustment of $81,000 in 2012.
• B)Sean will have a negative AMT adjustment of $9,000 in 2017.
• C)Over a 10-year period, positive and negative adjustments will net to zero.
• D)Only a.and c.are correct.
• E)a., b., and c.are correct.

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Definitions:

Tax

A compulsory monetary fee or different form of levy required from a taxpayer by a governmental body, used to finance government operations and various public costs.

Sellers

Entities or individuals that provide goods or services in exchange for payment, crucial to the operation of any market.

Tax

A compulsory financial charge imposed by a government on individuals, corporations, or goods to finance government activities and public expenditure.

Cigarette Consumption

The amount of cigarettes smoked by individuals or populations within a specified period.