Sheldon Corporation reports regular taxable income of $150,000 in the current year. Its regular tax is $41,750. Sheldon takes into account the following facts when calculating the $150,000 amount.
• Sheldon deducts $90,000 of MACRS depreciation for regular tax purposes. Depreciation for AMT purposes is $60,000.
• Sheldon sells equipment for $28,000. The equipment’s regular tax basis at the time of sale is $16,000, and its AMT basis is $25,000.
• Sheldon’s ACE is $340,000.
Sheldon is not a small corporation exempt from the AMT and has no AMT adjustment for the U.S. production activities deduction.
a. What is Sheldon’s AMT?
b. What minimum tax credit does Sheldon obtain in the current year? In what year(s) can Sheldon use it?