Question

If a taxpayer uses regular MACRS for all property, an alternative minimum tax adjustment is made with respect to the depreciation on all property, regardless of the class life.

a) True
b) False

Answer 1

If a taxpayer uses regular MACRS for all property, an alternative minimum tax adjustment is made with respect to the depreciation on all property, regardless of the class life.

Step-by-step explanation:

If a taxpayer uses regular MACRS for all property, an alternative minimum tax adjustment is made with respect to the depreciation on all property, regardless of the class life. This statement is TRUE. MACRS (Modified Accelerated Cost Recovery System) is a tax depreciation method used for property placed in service after 1986.

Under the regular MACRS, different property classes have different class lives, and the depreciation deductions are calculated accordingly. However, for alternative minimum tax (AMT) purposes, an adjustment is made to the depreciation deduction on all property. This means that regardless of the class life of the property, the AMT adjustment for depreciation will apply to all property.