In the current year, Whitaker Corporation has taxable income of $700,000 and tax preference items of $100,000.

Question:

In the current year, Whitaker has taxable income of $700,000 and tax preference items of $100,000. It also has $250,000 of positive AMT adjustment items and $80,000 of negative AMT adjustment items (neither of which includes the ACE adjustment). Whitaker’s ACE amount is $1.3 million. Whitaker is not a small exempt from the AMT. Determine the following for Whitaker:
a. AMTI
b. Tentative minimum tax (TMT)
c. AMT
d. Minimum tax credit
e. How much smaller would Whitaker’s tax preference and AMT adjustment items have to be for its AMT to be zero?
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...