Benita expensed mining exploration and development costs of $500,000 incurred in the current tax year. She will be required to make negative AMT adjustments for each of the next ten years and a positive AMT adjustment in the current tax year
a. True
b. False
Indicate whether the statement is true or false
False
RATIONALE: Ten year amortization of mining exploration and development costs is required for AMT purposes. Therefore, Benita will have a negative adjustment of $50,000 ($0 regular income tax deduction – $50,000 AMT deduction) for each of the next nine years and a positive AMT adjustment of $450,000 in the current tax year.
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Kelly, age 48, owns a universal life insurance policy (non-MEC) with a current death benefit of $270,000 and a cash value of $20,000. Her basis in the policy is $12,000. Kelly is interested in either borrowing or withdrawing $15,000 from this policy. What would be the tax consequences if she were to borrow the $15,000 through a policy loan?
A) Of the amount borrowed, $12,000 would be income tax-free, $3,000 would be subject to income taxation, and there would be an additional penalty tax. B) There would be no income taxation on any portion of the amount borrowed, whether or not she repaid the policy loan. C) Of the amount borrowed, $12,000 would be income tax-free and $3,000 would be subject to income taxation. D) There would be no income taxation on any portion of the amount borrowed, but if she did not repay the loan, $3,000 would be subject to income taxation.
There is no evaluation of vendor alternatives or information in which situation?
A) modified rebuy B) straight rebuy C) new task D) high-involvement