Question

A taxpayer may elect to use the AMT depreciation method for personal property for regular income tax purposes. If this election is made, no AMT adjustment is required because the depreciation deduction is the same for regular income tax and for the AMT._________

Answer 1

The statement in the previous paragraph is incorrect, so if the question is of the "true / false" type, the answer would be false.

Step-by-step explanation:

AMT depreciation rules were created in order to encourage the payment of those people or companies with properties that were paying a low level of taxes. What this model is looking for is to reduce the depreciation curve of the properties, making their value greater and, therefore, increasing the tax paid in relation to it. The model uses a combination of the 150-percent declining balance method and the straight-line method, resulting in a slower depreciation rate. The result: depreciation deduction will be less in the ATM depreciation method that in the regular income tax method.