In

$20242024,$

Ms$.$

AudreyAudrey

McCabeMcCabe

has net income of

$ $433$ comma $468$$$433,468.$

This amount is made up of taxable capital gains of

$ $394$ comma $000$$$394,000$

and eligible dividends of

$ $39$ comma $468$$$39,468$

$[(138138\%)($$ $28$ comma $600$$$28,600)].$

As the taxable capital gain was on a disposition of shares of a qualified small business corporation$($QSBC shares$),$ she reduced her taxable income by

$ $394$ comma $000$$$394,000$

to

$ $39$ comma $468$$$39,468$

through the use of the capital gains deduction. Her only tax credits are the BPA and the dividend tax credit.

Determine whether Ms$.$

McCabeMcCabe

would have an AMT liability$$ and, if$$ so$,$ the total AMT amount.

Question content area bottom

Part $1$

Start by calculating Ms$.$

McCabeMcCabe$\text{'}$s

regular federal taxable income for

$20242024.$

Eligible dividends

$39,468$

Taxable capital gains

$394,000$

Less: Capital gains deduction

$394,000$

$2024$ regular taxable income

Part $2$

In this$$ step, calculate Ms$.$

McCabeMcCabe$\text{'}$s

regular federal income tax payable. $($Round your answers to the nearest whole dollar. For entries with a$$ $$0$ balance, make sure to enter$"0"$ in the appropriate input$$ field.$)$

Federal income tax at $15\%$

$5,920$

BPA at $15\%$

$2,279$

Less: Dividend tax credit

$5,920$

$2024$ federal income tax payable$$regular

Part $3$

$$Next$,$ work on finding the alternative tax. In this$$ step, calculate the

$20242024$

adjusted taxable income for Ms$.$

McCabeMcCabe.

Eligible dividends

$28,600$

Capital gains

Capital gains deduction

$$

AMT basic exemption

$$

$2024$ adjusted taxable income

$$

Part $4$

$$Now$,$ calculate the alternative minimum tax. $($Round your answers to the nearest whole dollar. For entries with a$$ $$0$ balance, make sure to enter$"0"$ in the appropriate input$$ field.$)$

Adjusted taxable income

$$

Alternative minimum tax rate

$$

Alternative minimum tax before credits

$$

Dividend tax credit, AMT

$$

Less: BPA credit, AMT

$$

$2024$ alternative minimum tax

$$

Part $5$

Determine whether Ms$.$

McCabeMcCabe

would have an AMT liability. Choose the correct answer.

A$.$

Ms$.$

McCabeMcCabe

has an AMT liability because the AMT is greater than the regular federal income tax payable. The

$20242024$

AMT carry over can be claimed in the next seven taxation years when the regular federal income tax payable is greater than the AMT for that$$ carry$-$over year.

B$.$

Ms$.$

McCabeMcCabe

has an AMT liability because the AMT is greater than the regular federal income tax payable. The

$20242024$

AMT cannot be carried over for any future taxation year when the regular federal income tax payable is greater than the AMT in that taxation year.

C$.$

Ms$.$

McCabeMcCabe

does not have an AMT liability because the AMT is less than the regular federal income tax payable.

D$.$

Ms$.$

McCabeMcCabe

does not have an AMT liability because her regular federal income tax payable is$$ $$0.$

Choose the correct answer.