LO.3, 4 Merle purchased a copper mine several years ago for $750,000. His adjusted basis at the beginning of the year is $425,000. For the year, he deducts depletion of

$550,000 (greater of cost depletion of $230,000 or percentage depletion of $550,000)

for regular income tax purposes. Calculate Merle’s:

a. AMT adjustment.

b. Adjusted basis for regular income tax purposes.

c. Adjusted basis for AMT purposes.