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What AMT adjustments are required

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Problem - Archie runs a small mineral exploration business (as a sole proprietorship). In 2017, he purchased land (for $68,000) where he suspected a magnesium deposit was located. He incurred $18,000 of exploration costs related to the development of the magnesium mine in 2017 and an additional $22,000 of exploration costs in 2018. Archie elected to deduct these expenditures for regular tax purposes in both 2017 and 2018.

In 2019, given a decline in magnesium prices, Archie chose to sell the property for $66,000 rather than bring the mine to production.

What AMT adjustments are required in 2019 related to mine exploration expenditures and the sale of the land?

Reference no: EM132669484

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