CFP

By Investopedia AAA

Alternative Minimum Tax - Sample Questions 1 - 5

1. All of the following are AMT preference items EXCEPT:

A) Private purpose municipal bond interest
B)
Percentage depletion
C)
Public purpose municipal bond interest
D)
Bargain element on the exercise of an incentive stock option

2. Which of the following is a valid planning tip to help a taxpayer avoid AMT?

A) Defer the exercise of incentive stock options
B)
Invest in high dividend paying stocks
C)
Buy private activity municipal bonds
D) File married filing separately for a higher exclusion amount

3. Which of the following are exempt from AMT liability?

I. S-Corporations
II. C-Corporations in their first year of existence
III. Qualified Public Charities
IV. C-Corporation with less than $7,500,000 of gross receipts in their first year of existence will be exempt in year two.

A) I and II only
B)
I and III only
C)
I, II and III
D) I, II, III and IV

4. All of the following are true statements regarding AMT EXCEPT?

A) AMT tax rates are 26 and 28%.
B)
Tax-exempt interest from a private activity bond is a preference item.
C)
AMT liability is calculated on IRS Form 6251 for the individual tax filer.
D) Incentive stock options are considered an exclusion item.

5. All of the following are common "deferral items" EXCEPT?

A) Depreciation
B)
Standard deduction
C)
Intangible drilling costs
D) Incentive stock options

Answer Key
Related Articles
  1. Several things factor into the salary of a financial advisor. Here's a look.
    Investing Basics

    How Much Does A Financial Advisor Earn?

  2. With a long list of risks, losses associated with foreign exchange trading may be greater than initially expected. Here are the top 5 forex risks to avoid.
    Economics

    Top 5 Forex Risks Traders Should Consider

  3. ISAs are financial instruments that allow students to raise funds to pay for their degrees by selling shares in their future earnings.
    Investing Basics

    Funding Higher Education With An ISA

  4. Top Ways to protect your purchases from credit card hackers or security breaches.
    Credit & Loans

    7 Ways To Protect Against Credit Card ...

  5. The Internal Revenue Service's new 2015 contribution limits for tax-deferred savings plans are higher; here's what you and your clients should know.
    Investing Basics

    New 2015 Contribution Limits: Advisors ...

Trading Center