Question

For AMT purposes, circulation expenditures must be capitalized and amortized ratably over the three-year period beginning in the year the expenditures were made.

a) True
b) False

Answer 1

Circulation expenditures are not amortized over a three-year period for AMT purposes; instead, they are capitalized and deducted as a preference item in the AMT calculation.

Step-by-step explanation:

For Alternative Minimum Tax (AMT) purposes, the claim that circulation expenditures must be capitalized and amortized ratably over the three-year period beginning in the year the expenditures were made is false. This treatment aligns with regular tax purposes but for AMT, these expenditures are not amortized over a three-year period but rather are capitalized and deducted as a preference item in the computation of AMT.