Alabama Corporation conducts a copper mining business. During the current year, it reports regular taxable income of $400,000, which includes a $100,000 deduction for percentage depletion. The depletable property’s adjusted basis at year-end (before reduction for current year depletion) is $40,000. Cost depletion, had Alabama deducted it, would have been $30,000. Depreciation for other property is $140,000 for regular tax purposes and $90,000 for AMT purposes. Alabama sold an asset for which it included a $12,000 gain in regular taxable income. The asset’s adjusted basis is $10,000 higher for AMT purposes than for regular tax purposes. Alabama’s adjusted current earnings are $800,000. Alabama is not a small corporation exempt from the AMT and has no AMT adjustment for the U.S. production activities deduction.
a. What is Alabama’s AMTI and AMT?
b. What minimum tax credit does Alabama obtain in the current year? In what year(s) can Alabama use it?