What would be the alternative minimum tax liability for a corporation that is not exempt from the alternative minimum tax and whose tax return reflects the following for 2013?
Alternative minimum taxable income (after exemption)
$110,000
AMT foreign tax credit
5,000
Regular federal income tax (net of foreign tax credit)
A is corrent. The corporation’s tentative minimum tax ($110,000 x 20%) = $22,000 would be reduced by the $5,000 AMT foreign tax credit and $4,500 of regular federal income tax, resulting in an alternative minimum tax (AMT) liability of $12,500. B is incorrect. The AMT is reduced by the AMT foreign tax credit. C is incorrect. The applicable AMT rate is 20%. D is incorrect. The applicable AMT rate is 20%.
