QUESTION 1

Mandy, who is single and age 33, provides you with the following information from her financial records for 2016.

Regular income tax liability $ 8,000

AMT adjustments 10,000

AMT preferences 20,000

Taxable income 75,000

Calculate her AMT for 2016

	a.	$5,286
	b.	$8,000
	c.	$13,286
	d.	0.

20 points

QUESTION 2

Which of the following is not an itemized deduction allowed for AMT pruposes?

	a.	Casualty losses.
	b.	Charitable contributions.
	c.	Real estate taxes.
	d.	Medical expenses in excess of 10% of AGI.

20 points

QUESTION 3

Tanya, who is head of household and age 32, provides you with the following information from her financial records for 2016.

Regular income tax liability	$30,718
AMT positive adjustments	$30,000
AMT preferences	$20,000
Taxable income	$115,000

Calculate her AMTI for 2016.

	a.	$35,503.
	b.	$136,550.
	c.	$154,675.
	d.	$165,000.

20 points

QUESTION 4

Maxwell, who is single, owns a personal residence in the city. He also owns a townhouse near the ocean. He uses the townhouse as a vacation home. In March 2016 he borrowed $50,000 on a home equity loan and used the proceed to acquire a luxury automobile. During 2016, he paid the following amounts of interest.

On his personal residence $15,000

On the townhouse 6,000

On the home equity loan 4,000

On credit card obligations 2,000

What amount, if any, must Maxwell recognize as an AMT adjustment in 2016?

	a.	$0.
	b.	$2,000.
	c.	$4,000.
	d.	$6,000.

20 points

QUESTION 5

Which of the following is a postive adjustment for AMT?

	a.	Miscellaneous itemized deductions.
	b.	State income taxes.
	c.	Medical expenses.
	d.	All of the above.
	e.	None of the above.