Let\'s spend some more time considering TCO 4 with a practice quiz question. Agn

Question

Let's spend some more time considering TCO 4 with a practice quiz question.

Agnes is able to reduce her regular income tax liability from $40,000 to $36,000 as the result of the alternative tax on net capital gain. Agnes' tentative AMT is $50,000.

Agnes' tax liability is reduced by $4,000 as the result of the alternative tax calculation on net capital gain.

Agnes' AMT is increased by $4,000 as the result of the alternative tax calculation on net capital gain.

Agnes' tax liability is $46,000.  

Agnes' tax liability is $54,000.  

None of the above  

Please state and justify your response.

Explanation / Answer

Agnes Tentative amount =$50000

Increaseed by $4000 = $54000

Less:tax liability reduced

by $4000 =$4000

Net capital gain = $50000

Answer is None of the above.

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