For the current year, Delta Corporation reports taxable income of $2 million, tax preference items of $100,000, net positive AMT adjustment items (other than the ACE adjustment) of $600,000, and adjusted current earnings of $4 million. Delta is not a small corporation exempt from the AMT and has no AMT adjustment for the U.S. production activities deduction.
a. What is Delta’s regular tax?
b. What is Delta’s AMT?
c. What is Delta’s total tax?
d. What minimum tax credit does Delta obtain? In what year(s) can Delta use it?
e. Suppose Delta qualified as a small corporation exempt from the AMT. How would your answers to Parts a, b, and c change?