The alternative minimum tax

a. is an additional tax above and beyond the base rate.

b. requires people to pay a minimum tax of 20 percent.

c. allows a reduction in business taxes based on investment in equipment.

d. allows larger-than-normal depreciation charges.

The alternative minimum tax requires people to pay a minimum tax of 20 percent.

Answer: Option B.

Explanation:

Alternative Minimum Tax (AMT) makes sure that taxpayers pays a minimum tax of at least 20 percent. The rules used to calculate the AMT is different from the rest, it evaluates the income of the tax after the allowed deductions.

The working of AMT is such that, AMTI and AMT of every tax payer is taxed by using the relevant rate schedule. Many adjustments are made in computing AMT such as any kind of deduction in miscellaneous items are excluded, there's also an adjustment made in the medical expenses, businesses and so on.