In 2017, Job Corporation, a calendar year taxpayer, has AMTI (before adjustment for adjusted current earnings) of $7 million. If Job Corporation's ACE is $16 million, its tentative minimum tax for 2017 is:
a. $2.55 million.
b. $2.75 million.
c. $3.45 million.
d. $4.2 million.
e. None of the above.
b
RATIONALE: Job's AMT of $7 million is increased by the $6.75 million ACE adjustment [($16 million – $7 million) × 75%]. The total of $13,750,000 is multiplied by the AMT tax rate of 20% to yield a tentative minimum tax of $2,750,000 . No exemption is allowed as AMTI is greater than $310,000.
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