What does tentative minimum tax mean on the CPA exam?
Tentative minimum tax. The alternative minimum tax computed on its own, before comparing it to the regular tax. Only the excess over regular tax is actually owed as AMT.
Defined against Sec. 55(b).
Which CPA exam sections use tentative minimum tax?
Tentative minimum tax appears in the TCP section of the CPA exam.
Other names for tentative minimum tax
TMT
Related terms
- regular tax: Tax computed under the ordinary rules, before the alternative minimum tax is considered.
- kiddie tax: Taxing a child's unearned income above a threshold at the parents' rate, so that income cannot be shifted to a lower bracket by gift.
- self-employment tax: Social Security and Medicare tax paid by someone working for themselves, covering both the employee and employer halves.
- material participation: Involvement in an activity that is regular, continuous and substantial, tested against seven alternative standards.
- retrospective review: Comparing last period's accounting estimates against what actually happened, to see whether management's judgments lean consistently in one direction.