Archie runs a small mineral exploration business (as a sole proprietorship). In 2015, he purchased land (for $68,000) where he suspected a magnesium deposit was located. He incurred $18,000 of exploration costs related to the development of the magnesium mine in 2015, and an additional $22,000 of exploration costs in 2016. Archie elected to deduct these expenditures for regular tax purposes in both 2015 and 2016.
In 2017, given a decline in magnesium prices, Archie chose to sell the property for $66,000, rather than bring the mine to production. What AMT adjustments are required in 2017 related to mine exploration expenditures and the sale of the land?