Which one of the following does not describe the minimum tax credit? a. Indefinite carryforward b. Offsets any future minimum tax liability c. Offsets any future regular tax liability d. Referred to as the adjusted net minimum tax
Ans. A taxpayer who was subject to AMT in a previous year maybe entitled to a credit against his or her regular tax called the minimum tax credit.
In calculating the AMT a taxpayer starts with regular tax adjusted gross income and adds or subtracts from itany AMT adjustment or preference items.
So in this case option b does not define the Minimum tax credit, because minimum tax credit can only be offsets with regular tax liability and not minimum tax liability.
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