Factors That Can Cause the Adjusted Basis for AMT Purposes

question 4

Multiple Choice

Factors that can cause the adjusted basis for AMT purposes to be different from the adjusted basis for regular income tax purposes include:

• A)A different amount of depreciation has been deducted for AMT purposes and regular income tax purposes.
• B)The spread on the exercise of an incentive stock option (ISO) is recognized for AMT purposes,but is not recognized for regular income tax purposes.
• C)A different amount has been deducted for circulation expenditures for AMT purposes and for regular income tax purposes.
• D)Only a.and b.
• E)a.,b.,and c.

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Definitions:

Net Book Value

The value of an asset after subtracting accumulated depreciation or amortization from its original cost.

TSX

The Toronto Stock Exchange, a major stock exchange in Canada where shares of public companies are traded.

Outstanding Shares

The total number of shares of a corporation that are currently owned by investors, including restricted shares owned by the company's officers and insiders.

Fair Value

An estimate of the market price of an asset or liability, based on the current market conditions and the asset's characteristics.