Corporations subject to the AMT are penalized because they took advantage of tax preferences during the year. If Congress doesn’t want corporations to take advantage of a certain tax preference, why doesn’t Congress simply repeal the preference?
Answer to relevant QuestionsFor the last six years, Corporation V’s AMTI has exceeded its regular taxable income, but it has never paid AMT. Can you explain this result? Corporation AB’s marginal tax rate is 15 percent, and Corporation YZ’s marginal tax rate is 35 percent. a. If both corporations are entitled to an additional $5,000 deduction, how much tax savings will the deduction ...Grand Inc. has taxable income of $1.25 million before any NOL deduction. It has $2.8 million of NOL carry-forwards but no other AMT adjustments or preferences. Compute Grand’s tax. This year, Napa Corporation received the following dividends: KLP Inc. (a taxable Delaware corporation in which Napa holds an 8% stock interest) ……………… $ 55,000 Gamma Inc. (a taxable Florida corporation in which ...This year, Prewer Inc. received a $160,000 dividend on its investment consisting of 16 percent of the outstanding stock of TKS Inc., a taxable domestic corporation. Before considering this dividend, Prewer had a $43,500 ...
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