Which of the following is an adjustment for alternative minimum taxable income purposes?
state income taxes paid
For individuals the AMT tax rate ranges from 26% to 28%.
True
What is the maximum percentage of a regular tax net operating loss that may be used for AMT purposes?
90%
Amounts received under a life insurance contract paid to a terminally or chronically ill insured individual are included in taxable income.
False
Joe has a life insurance policy that has an outstanding loan in the amount of $20,000. He has paid 10,000 in premiums. He surrenders the policy when it has a cash value of $21,000, which includes the value of the loan. What is the taxable income to be rep
$11,000
Premiums paid on life insurance policy owned by a qualified charitable organization are deductible to the donor as a charitable contribution on the donor's tax return.
True
The transfer of a life insurance policy between spouses as a result of a divorce is generally not taxable.
True
For the 7 pay test, if premiums paid are greater than the net level premium calculation for the first 7 years of the policy, that policy will be treated as a modified endowment contract (MEC).
True
If a policy is determined to be a modified endowment contract (MEC) any loan or withdrawal of funds will be considered to come from income first before basis (LIFO).
True
A material change in a policy can cause a non MEC policy to become a MEC.
True
For a burial contract to not be considered a MEC it must have a face amount less than
$25,000