2017 Fall #21

danwang0509danwang0509
in Odomirok.26-Taxes

In the solution step 2, AMTI calculation, where does the 75% come frome?
Thanks.

Comments

  • grahamgraham

    Sorry, I guess I didn't make that too clear. It's just a formula from the text. It's on the 2nd last line of page 330 in Odomirok. That sentence says:

    • AMTI consists of regular taxable income plus 75% of income that escapes regular taxation, such as the complement of the prorated municipal bond interest included in regular taxable income.

    So it's always 75% regardless of any other information given in the question.

  • danwang0509danwang0509

    Thanks!

  • kulotuskulotus

    Is this problem not outdated even though it uses the calculation for AMTI?

  • grahamgraham
    edited October 2021

    Yeah, I missed that one. I've turned it orange to indicate it's at least partly outdated because of the reference to AMTI. Thx!

  • hreese456hreese456

    Since the more involved process of calculating the tax on Dividends is no longer in the syllabus, would we just add the whole amount of Dividends to the RTI?

  • grahamgraham

    I don't think that would be a good idea! They should really not provide dividend information at all so you shouldn't have to deal with it.

    (If they do provide dividend information, I would include a comment that dividend taxation was removed in the current version of Odomirok's CAS Financial Reporting text. I would also submit an appeal about a defective question immediately after the exam.)

  • mec06emec06e
    edited October 2022

    so now the dividend piece is also outdated right?
    meaning the Tax Bases for investments would just be = 20*.25
    20 being the interest on the municipal bonds

  • Staff - ACStaff - AC

    Yes, this is correct.

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