Chartered Retirement Planning Counselor (CRPC) Practice Exam 2025 - Free CRPC Practice Questions and Study Guide

For alternative minimum tax (AMT) purposes, adjustments are made to taxable income to ensure that individuals who benefit from certain deductions and credits still pay a minimum level of tax. Accelerated depreciation is one of these adjustments because it can reduce taxable income significantly in the earlier years of an asset’s life. However, the AMT system seeks to limit the tax advantages from such depreciation by adding back certain amounts to income when calculating AMT.

In contrast, moving expenses and personal exemptions are not considered adjustments for AMT. Moving expenses, for example, are generally not deductible for AMT purposes, particularly after the tax law changes that limit their deductibility for most taxpayers. Similarly, personal exemptions are eliminated for AMT calculations, as the AMT system operates without personal exemptions altogether. The earned income credit also does not apply under AMT calculations, as it is a specific tax credit and not an adjustment to income.

Thus, because accelerated depreciation impacts the way taxable income is calculated under AMT, it is recognized as an adjustment, highlighting its significance in maintaining a fair tax obligation across varied income streams and deduction strategies.