Rover Corporation

AMT Example

 

Rover Corporation provides the following information:

Gross Sales    $410,000
Sales Returns and Allowances    $10,000
 Dividends Received    
10% owned company    $30,000
20% owned company    $20,000
Gain on Sale of Depreciable Property    $15,000
Installment Gain on Land Sale    $25,000
Operating Expenses    $200,000
 Depreciation    $50,000
Amortization of Organizational Expenses    $2,500

Footnotes

1. Received $25,000 from Private Activity Bonds (tax-exempt).
2. Received $15,000 from General fund bonds (tax-exempt).
3. Received Life Insurance Proceeds upon death of key employee $150,000.
4. Total Gain on land was $88,000; Rover is not a dealer.
5. Gain for AMTI is $5860, ACE $3750 for depreciable property sale.
6. Depreciation for AMTI is $32,500 and ACE $26,000.
7. Organizational expenses were incurred in 1996 and amortized over 60 months.

 

Determine the AMT liability of Rover Corporation.