-2019- Your client, William Warrant, was hired for a management position at an Internet company planning to start a website called “indulgedanimals.com” for dogs, cats, and other pets. When he was hired, William was given an incentive stock option (ISO) worth $500,000, which he exercised during the year. Exercise of the ISO creates a tax preference item for alternative minimum tax (AMT) and causes him to have to pay substantial additional tax when combined with his other tax items for the year. He is livid about the extra tax and refuses to file the AMT Form 6251 with his tax return because the AMT tax is “unfair” and “un-American” according to him. Would you sign this tax return?Why?
Answer
Alternate Minimum Tax is levied because of the fact that the amount of tax currently being assessed is lower than the provisional minimum tax that is required to be paid to Government as per Income Tax Act ,1961.
Therefore the contension of assessee that the tax is Unfair and Unamerical is not tenable.
NOTE - there for he would not sign the tax return.
ThereWilliam Warrant, was hired for a management position at an Internet company planning to start a website called “indulgedanimals.com” for dogs, cats, and other pets. When he was hired, William was given an incentive stock option (ISO) worth $500,000, which he exercised during the year. Exercise of the ISO creates a tax preference item for alternative minimum tax (AMT) and causes him to have to pay substantial additional tax when combined with his other tax items for the year .is not possible as per income tax act .
-2019- Your client, William Warrant, was hired for a management position at an Internet company planning...
CASE 20 Enron: Not Accounting for the Future* INTRODUCTION Once upon a time, there was a gleaming office tower in Houston, Texas. In front of that gleaming tower was a giant "E" slowly revolving, flashing in the hot Texas sun. But in 2001, the Enron Corporation, which once ranked among the top Fortune 500 companies, would collapse under a mountain of debt that had been concealed through a complex scheme of off-balance-sheet partnerships. Forced to declare bankruptcy, the energy firm...
Case: Enron: Questionable Accounting Leads to CollapseIntroductionOnce upon a time, there was a gleaming office tower in Houston, Texas. In front of that gleaming tower was a giant “E,” slowly revolving, flashing in the hot Texas sun. But in 2001, the Enron Corporation, which once ranked among the top Fortune 500 companies, would collapse under a mountain of debt that had been concealed through a complex scheme of off-balance-sheet partnerships. Forced to declare bankruptcy, the energy firm laid off 4,000...