Example Question #1 : Federal Taxation Of Entities
If the Alpha Corporation's 2015 alternative minimum taxable income was . Which of the following properly identifies the exempt portion of the Alpha Corporation's 2015 alternative minimum taxable income?
This problem asks us to determine the exempt portion of the Alpha Corporation's alternative minimum taxable income (AMTI). A corporation is allowed an exemption of up to in computing it AMTI; however, this exemption is reduced by twenty-five percent of the corporation's AMTI in excess of . We can write this by using the following equation:
Substitute and solve.
Example Question #2 : Federal Taxation Of Entities
For the current year, The Echo Company possessed the following income:
In the Echo Company's current year taxable income, how much should be included for dividends received?
Cannot be determined
This problem is asking us to determine the amount of dividends to be included in the Echo Company's taxable income for the current year. The dividends were received from 20%-owned taxable domestic corporations; therefore, they are eligible for an 80% dividends received deduction. We can compute this value using the following formula: