Assume a Corporation Is Not Required to Pay AMT in the Current

question 7

Multiple Choice

Assume a corporation is not required to pay AMT in the current year but will pay AMT next year. Also assume the corporation's regular marginal tax rate is 35%. Which tax planning strategy would minimize its after-tax cost of a charitable contribution it is considering paying to a qualified charity?

• A) Pay the contribution this year.
• B) Wait until next year to pay the contribution.
• C) The after-tax cost of the contribution will be the same no matter which year it makes the contribution.
• D)None of these.

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Definitions:

24-hour Recall

A dietary assessment tool where individuals report all the foods and beverages consumed during the previous 24 hours.

Food Diary

A record used to track what an individual eats, typically to monitor dietary habits for health or weight management purposes.

Morbidly Obese

Morbid obesity is a condition characterized by an individual having a Body Mass Index (BMI) of 40 or higher, which significantly increases the risk of various health issues.

BMI

Body Mass Index, a measure of body fat based on height and weight that applies to adult men and women.