In an audit of Control Corporation, you were assigned to review the company’s current-year tax accrual (e.g., provision for federal income taxes and the related liability). Control was incorporated in 2000. The following tax information is available for your review:
• Taxable income for regular tax purposes is $150,000.
• Depreciation for regular tax purposes is $100,000. Depreciation for AMT purposes is $71,000.
• Adjusted current earnings is $370,000.
• No AMT adjustment for the U.S. production activities deduction.
Assume that Control is not eligible for the small corporation AMT exemption.
a. What is the total amount of Control’s AMT adjustments for the current year?
b. Calculate the following amounts for Control:
• Alternative minimum taxable income
• AMT base
• Tentative minimum tax
• Alternative minimum tax
• Total tax liability