Sheldon Corp. reports regular taxable income of $150,000 in the current year. It

Question

Sheldon Corp. reports regular taxable income of $150,000 in the current year. It's regular tax is $41,750. Sheldon takes into account the following facts when calculating the $150,000 amount.

* Sheldon deducts $90,000 of MACRS depreciation for regular tax purposes. Depreciation for AMT purposes. Depreciation for AMT purposes is $60,000.

* Sheldon sells equipment for $28,000. THe equipment regular tax basis at the time of sake is $16,000, and its AMT basis is $25,000.

* Sheldons ACE is $340,000.

Sheldon is NOT a small corporation exempt from the AMT and has NO AMT adjustment for the US Production Activities deduction.

1. What is Sheldons AMT?

2. What minimum tax credit does Sheldon obtain in the current year? In what years can Sheldon use it?

Explanation / Answer

1) sheldon AMT = 60000+25000 = $85000 2)minimum tax credit Sheldon obtain in the current year = 90000+16000 = $106,000

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