Identify the tax issue(s) suggested by the following situations and state each issue in the form of a question. Do not answer
the question, just identify what the issues are.
1. Several years ago Amusement Corporation purchased heavy machinery for $618,000. It sold the machinery this year for $500,000. Through the date of sale, MACRS depreciation on the machinery was $320,000, while AMT depreciation was $198,000. Amusement has paid AMT in three of its last five years and expects to so again this year.