Question

Which one of the following situations is NOT likely to cause a taxpayer to become subject to the alternative minimum tax?

Answer 1

The situation of a company adopting technologies to avoid state or local taxes is NOT likely to cause a taxpayer to become subject to the alternative minimum tax.

Step-by-step explanation:

The alternative minimum tax (AMT) is a parallel tax system in the United States that was introduced to ensure that high-income individuals and corporations pay a minimum amount of tax, even if they have deductions and credits that reduce their regular tax liability.

It is not based on state or local taxes, but rather on federal tax calculations. Therefore, the situation of a company adopting technologies to avoid state or local taxes is not likely to cause a taxpayer to become subject to the alternative minimum tax.