Chapter C5 Other Corporate Tax Levies

72) Hydrangia Corporation reports the following results for the current year:

Taxable income $300,000

Interest on private activity bonds 20,000

Life insurance proceeds 250,000

Dividends-received deduction 50,000

Depreciation claimed for:

Taxable income purposes 175,000

AMT purposes 130,000

Adjusted current earnings 800,000

What is Hydrangia Corporation's alternative minimum tax liability?

73) Barker Corporation, a personal service company, has $200,000 of taxable income. Barker has tax preferences and positive adjustments of $200,000 and negative adjustments of $140,000 for alternative minimum tax purposes. No credits are available. Barker's regular tax liability is $70,000. What is the tentative minimum tax amount?

74) Arnold Corporation reports taxable income of $250,000, tax preference items of $20,000, and positive AMT adjustments of $20,000. What is its statutory exemption, when computing alternative minimum taxable income?

75) Door Corporation's alternative minimum taxable income before the statutory exemption is $200,000. What is Door's tentative minimum tax before credits?

76) Barker Corporation, a personal service company, has $200,000 of taxable income. Barker has tax preferences and positive adjustments of $200,000 and negative adjustments of $140,000 for alternative minimum tax purposes. No credits are available. Barker's regular tax liability is $70,000. How much is its alternative minimum tax liability?

77) Drury Corporation, which was organized three years ago, reports the following adjusted current earnings (ACE) and preadjustment alternative minimum taxable income (AMTI) amounts.

	Second previous year	Last year	Current year
ACE AMTI (excluding ACE adjustment)	$3,000 2,500	$2,000 2,000	$1,000 2,500

What is the ACE adjustment to increase (or decrease) taxable income to arrive at AMTI for the second previous year?

78) Drury Corporation, which was organized three years ago, reports the following adjusted current earnings (ACE) and preadjustment alternative minimum taxable income (AMTI) amounts.

	Second previous year	Last year	Current year
ACE AMTI (excluding adjustments)	$3,000 2,500	$2,000 2,000	$1,000 2,000

What is the ACE adjustment to increase (or decrease) taxable income to arrive at AMTI for the current year?