[vukz]

Could someone please explain the adjustments for AMT and ACE? I am not sure exactly what the composition of each is and in what detail we are going to have to know in order for teh exam. My impression is that you start with taxable income and (+/-) Adjustments and (+/-) Preferences to arrive at AMTI? Any help would be greatly appreciated.

Thanks,

Vukz

FAR (75)
AUD (76)
BEC (75)
REG (72), (80)

[herbert7890]

Since your mentioning ACE adjustments, I assume your talking about Corporate AMT.

AMT adjustments for a corporation – Use the LIE acronym

L-Long term contracts – Percentage of completions vs completed contract

I- Installment income of a dealer- accrual revenue vs installment sale revenue

E-Excess depreciation

ACE Adjustments – use the MIND acronym

M- Municipal Bonds Interest

I- Increase in cash surrender value of insurance

N- Non straight line depreciation

D- Dividends received deduction (less than 20% ownership)

FAR 88 - BEC 86 - AUD 90 - REG 85

[vukz]

Thanks for the feedback. So my understanding is that I begin with Taxable Income…..+/- all my adjustments and preferences items based on the LIR acronym in order to arrive at AMTI….then I take the “corporations economic earnings” (which is what exactly) adjust using the MIND acronym in order to get my ACE adjustment……last I should subtract my ACE from my AMTI to arrive at my AMT?

Also with regards to personal AMT there is no adjustment for ACE

Thanks again

Vukz

FAR (75)
AUD (76)
BEC (75)
REG (72), (80)

[herbert7890]

I forgot to include the preferences – PPP acronym (this will always be add-backs)

P- Private Activity Bonds Interest

P- Percentage depletion

P- Pre-1987 Depreciation

FAR 88 - BEC 86 - AUD 90 - REG 85

[Author]

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