Problem 12-30 (Algorithmic) (LO. 3)

Archie runs a small mineral exploration business (as a sole proprietorship). In 2019, he purchased land (for $76,000) where he suspected a magnesium deposit was located. He incurred $26,000 of exploration costs related to the development of the magnesium mine in 2019 and an additional $22,000 of exploration costs in 2020. Archie elected to deduct these expenditures for regular tax purposes in both 2019 and 2020.

In 2021, given a decline in magnesium prices, Archie chose to sell the property for $74,000, rather than bring the mine to production. What AMT adjustments are required in 2021 related to mine exploration expenditures and the sale of the land?

As a result, in 2021 a $4800

negative

AMT adjustment is required for mine exploration expenditures and a $?????

negative

AMT adjustment for the sale of the land.

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It is necessary to determine not only the amount of an adjustment but also whether the adjustment is positive or negative.