C is corrent. A corporation is allowed an exemption of $40,000 in computing its alternative minimum taxable income (AMTI). However, the $40,000 exemption is reduced by 25% of the corporation’s AMTI in excess of $150,000. Here, the amount of exemption is $40,000 — [($250,000 — $150,000) x 25%] = $15,000.
A is incorrect. The $40,000 exemption is reduced by 25% of AMTI in excess of $150,000.
A is incorrect. The $40,000 exemption is reduced by 25% of AMTI in excess of $150,000.
D is incorrect. The $40,000 exemption is reduced by 25% of AMTI in excess of $150,000.
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