What is difference between tentative minimum tax and the amt

Assignment Help Taxation

Reference no: EM13906011

1. What is the difference between the tentative minimum tax (TMT) and the AMT?

2. Lee is single and he runs his own business. He uses the cash method of accounting to determine his business income. Near the end of the year, Lee performed work that he needs to bill a client for. The value of his services is $5,000. Lee figures that if he immediately takes the time to put the bill together and send it out, the client will pay him before year-end. However, if he doesn't send out the bill for one week, he won't receive the client's payment until the beginning of next year. Lee expects that he will owe AMT this year and that his AMT base will be around $200,000 before counting any of the additional business income. Further, Lee anticipates that he will not owe AMT next year. He anticipates his regular taxable income next year will be in the $200,000 range. Would you advise Lee to immediately bill his client or to wait? What factors would you consider in making your recommendation?

Reference no: EM13906011

Questions Cloud

Describe epidemiological or preventive public health measure : Describe epidemiological or preventive public health measures for tuberculosis

Pure and free of oxygen : If on a nitrogen cylinder it says OFN oxygen free and has a purity of 99.995 is it pure and free of oxygen?

Are an employees entire wages subject to the fica tax : Are an employee's entire wages subject to the FICA tax? Explain. Bobbie works as an employee for Altron Corp. for the first half of the year and for Betel Inc. for the rest of the year.

What are the products of calorimetry : What are the products of calorimetry, and where do the products go?

What is difference between tentative minimum tax and the amt : What is the difference between the tentative minimum tax (TMT) and the AMT? Lee is single and he runs his own business. He uses the cash method of accounting to determine his business income

What are resonance structures? : What are resonance structures?

Contact with liquid water at the same temperature : Why would contact with steam at 100 C produce a more severe burn than contact with liquid water at the same temperature?

Following is information on two alternative investments : Following is information on two alternative investments being considered by Jolee Company.

The dosit corporation is a chemical manufacturer : The Dosit Corporation is a chemical manufacturer, and its products are sold to other manufacturers and used in household cleaning products. The company has 290 employees with about 220 involved in the production process, 30 working as maintenance per..

User Account

All Pages