Thanks. Gleim has so many questions that require you to know the various tax credits, the maximum amount of the credit and how it's calculated, AGI limits/phaseouts for each, and the calculation for the phaseout. I can't possibly memorize this for dozens of tax credits, and when I ask my “personal counselor,” I get different responses regarding whether it will be given or I need to have it memorized. They get extremely complex. Here is one that is actually pretty simple by comparison:
Rona Corp.’s 2014 alternative minimum taxable income was $200,000. The exempt portion of Rona’s 2014 alternative minimum taxable income was
B. $27,500
Answer (B) is correct.
The basic exemption amount is $40,000. However, this is reduced by 25% of the excess of alternative minimum taxable income over $150,000. Therefore, Rona Corp.’s exemption amount is reduced by $12,500 [($200,000 – $150,000) × 25%]. Rona’s exempt amount is $27,500.
Are most people here memorizing all of this: a) the basic exemption amount, b) the AMTI limit of $150k, and c) the fact that the credit is reduced by 25% of the excess over the limit? Am I expected to know all this for REG?
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