Farr, who is single, has no dependents and does not itemize her deductions. She reports the following items on her 2016 tax return.
Bargain element from the exercise of an ISO
(no restrictions apply to the stock)................................................$ 45,000
MACRS depreciation on shopping mall building acquired in 2012............49,000
Percentage depletion in excess of property's adjusted basis.....................50,000
Taxable income for regular income tax purposes.................................121,000
Regular tax liability.....................................................................26,452
a. Determine Farr's AMT adjustments and preferences for 2016.
b. Calculate Farr's AMT for 2016.