For 2015, Apple Corporation (a calendar year integrated oil company) had the fol

Question

For 2015, Apple Corporation (a calendar year integrated oil company) had the following transactions:

Assume no ACE adjustment.

a) Determine Apple Corp. AMTI for 2015.

b) Determine the tentative minimum tax base

c) Determine the tentative minimum tax

d) What is the amount of any AMT?

Taxable Income $3,600,000 Reg. tax depreciation on realty in excess of ADS (placed in service in 1989 $1,530,000 Excess intangible drillings costs $450,000 Percentage depletion in excess of the property's adjusted basis $630,000

Explanation / Answer

a) Apple Corp. AMTI for 2015
Taxable Income $3,600,000
Adjustment:
Accelerated depreciation on realty in excess of straight-line $1,530,000
Tax Preference:
Excess intangible drillings costs $450,000
Percentage depletion in excess of the property's adjusted basis $630,000 $1,080,000
Alternative minimum taxable income   $6,210,000

b.Tentative minimum tax base
Alternative minimum taxable income   $6,210,000
Less: Exemption (AMTI exceeds $310,000)   ($0)
Tentative minimum tax base $6,210,000

c. Tentative minimum tax
Alternative minimum taxable income   $6,210,000
Rate 20%
Tentative minimum tax $6,210,000 x 20% = $1,242,000

d.
Tentative minimum tax $1,242,000
Less: Regular tax $3,600,000 x 34% ($1,224,000)
AMT $18,000

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