Question 1

The earned income credit:

Accepted Answer

A) Must be calculated on earned income as well as adjusted gross income in some cases. 
B) Can not exceed the amount of the tax liability. 
C) Is available only if the taxpayer has qualifying children. 
D) Is available to married taxpayers who file separate returns. 
A) Must be calculated on earned income as well as adjusted gross income in some cases. 
B) Can not exceed the amount of the tax liability. 
C) Is available only if the taxpayer has qualifying children. 
D) Is available to married taxpayers who file separate returns.

Question 2

Steve goes to Tri-State University and pays $40,000 in tuition. Steve works a part-time job to pay for his schooling and has an AGI of $17,000. How much is his American Opportunity tax credit?

Accepted Answer

A) $2,000 
B) $2,500 
C) $4,000 
D) $1,000 
E) He does not qualify for the American Opportunity tax credit. 
A) $2,000 
B) $2,500 
C) $4,000 
D) $1,000 
E) He does not qualify for the American Opportunity tax credit.

Question 3

All taxpayers are required to have minimum essential health coverage.​

Accepted Answer

A) True 
 B)False

Question 4

In calculating the individual AMT, the tentative minimum tax liability may not exceed the regular tax liability of the taxpayer.

Accepted Answer

A) True 
 B)False

Question 5

For 2015, which of the following is a tax adjustment or tax preference item for the individual AMT computation?

Accepted Answer

A) Deduction of charitable contribution of tangible personal property 
B) IRA contribution deduction 
C) Miscellaneous itemized deductions 
D) Moving expense deduction 
E) None of the above 
A) Deduction of charitable contribution of tangible personal property 
B) IRA contribution deduction 
C) Miscellaneous itemized deductions 
D) Moving expense deduction 
E) None of the above

Question 6

Patricia and Cliff are married but file separate tax returns. Patricia received a salary of $42,000 and Cliff received $15,000 of dividends from a stock portfolio that is his own separate property.
a.If Patricia and Cliff live in a common law state, what income should Patricia show on her separate return?
Salary
Dividends
b.If they live in California (a community property state), what income should Patricia show on her separate return?
Salary
Dividends

Accepted Answer

The answer of Patricia and Cliff are married but file...

Question 7

The use of the earned income credit could result in a taxpayer receiving a refund even though he or she has not paid any income taxes.

Accepted Answer

A) True 
 B)False

Question 8

Jeff and Geri are married and have AGI of $95,000 and three young children. Geri pays $6,000 a year to day care providers so she can teach a yoga class and do household errands. Geri earns $5,000 teaching the yoga class. How much child and dependent care credit can Jeff and Geri claim? Why?

Accepted Answer

$1,000, or $5,000 × 20%. Geri's earned i

Question 9

Which of the following itemized deductions may not be deducted in computing the individual alternative minimum tax?

Accepted Answer

A) Qualified home mortgage interest 
B) State income taxes 
C) Medical expenses (limited to 10 percent of AGI) 
D) Charitable deductions 
E) All of the above 
A) Qualified home mortgage interest 
B) State income taxes 
C) Medical expenses (limited to 10 percent of AGI) 
D) Charitable deductions 
E) All of the above

Question 10

New York is a community property state.

Accepted Answer

A) True 
 B)False

Question 11

Keith has a 2015 tax liability of $2,250 before taking into account his American Opportunity tax credit. He paid $2,600 in qualifying expenses, was a full-time student, was not claimed as a dependent on his parents' return, and his American Opportunity tax credit was not subject to phase-out. What is the amount of his American Opportunity tax credit allowed?

Accepted Answer

A) $0 
B) $2,150 
C) $2,250 
D) $2,600 
E) $4,000 
A) $0 
B) $2,150 
C) $2,250 
D) $2,600 
E) $4,000

Question 12

Glen and Mary have two children, Chad, age 12, and Linda, age 8. For 2015, Chad has $4,000 in net unearned income and Linda has net unearned income of $1,000. If the total parental tax for 2015 is $1,500, how would the tax be allocated between Chad and Linda?

Accepted Answer

A) $1,500 to Chad and $0 to Linda 
B) $1,200 to Chad and $300 to Linda 
C) $1,120 to Chad and $280 to Linda 
D) $750 to Chad and $750 to Linda 
E) None of the above 
A) $1,500 to Chad and $0 to Linda 
B) $1,200 to Chad and $300 to Linda 
C) $1,120 to Chad and $280 to Linda 
D) $750 to Chad and $750 to Linda 
E) None of the above

Question 13

A parent may elect to include a child's income in the parent's return if:

Accepted Answer

A) The child is under age 18. 
B) The child's income is only from interest and dividend distributions. 
C) The child's gross income is more than $1,050 and less than $10,500. 
D) All of the above must be met for a parent to elect to include a child's income in the parent's return. 
A) The child is under age 18. 
B) The child's income is only from interest and dividend distributions. 
C) The child's gross income is more than $1,050 and less than $10,500. 
D) All of the above must be met for a parent to elect to include a child's income in the parent's return.

Question 14

Arthur is divorced with two dependent children, ages 8 and 13. His adjusted gross income is $28,000, and he incurs qualified child care expenses of $6,000, $3,000 for each child.
a.What is the amount of Arthur's qualified child care expenses after any limitation?
b.Calculate the amount of Arthur's child and dependent care credit.

Accepted Answer

The answer of Arthur is divorced with two dependent children,...

Question 15

Taxpayers are required to wait until they file their tax return to receive the premium tax credit. ​

Accepted Answer

A) True 
 B)False

Question 16

Daddy Warbucks is in the process of adopting Annie from a New York orphanage. He pays $5,000 in 2013, $7,000 in 2014, and $4,500 in 2015. Daddy Warbucks' AGI for 2015 is $165,000.
​
a.How much is the adoption credit that Daddy Warbucks may claim for 2015 if the adoption becomes final in 2015?
b.How much is the adoption credit that Daddy Warbucks may claim for 2015 if the adoption becomes final in 2016?
c.How much is the adoption credit that Daddy Warbucks may claim for 2015 if the adoption falls through and is never finalized?

Accepted Answer

a. $8,400. $11,400 ($7,000 + $

Question 17

What is the maximum investment income a taxpayer is allowed to have and still be allowed to claim the earned income credit? Why is there an earned income credit in the law?

Accepted Answer

A taxpayer may have a maximum of $3,400

Question 18

In determining the amount of the child and dependent care credit, there is a limit of $2,000 on the amount of qualified expenses for one dependent.

Accepted Answer

A) True 
 B)False

Question 19

A taxpayer with earned income of $50,000 is not eligible to claim the credit for child and dependent care expenses.

Accepted Answer

A) True 
 B)False

Question 20

Bob and Carol file their tax returns using the married filing jointly status. Their AGI is $132,500. They have two children, ages 11 and 7. How much child tax credit can Bob and Carol claim for their two children?

Accepted Answer

A) $0 
B) $850 
C) $875 
D) $1,150 
E) None of the above is correct. 
A) $0 
B) $850 
C) $875 
D) $1,150 
E) None of the above is correct.

The earned income credit:

Steve goes to Tri-State University and pays $40,000 in tuition. Steve works a part-time job to pay for his schooling and has an AGI of $17,000. How much is his American Opportunity tax credit?

All taxpayers are required to have minimum essential health coverage.

In calculating the individual AMT, the tentative minimum tax liability may not exceed the regular tax liability of the taxpayer.

For 2015, which of the following is a tax adjustment or tax preference item for the individual AMT computation?

The use of the earned income credit could result in a taxpayer receiving a refund even though he or she has not paid any income taxes.

Jeff and Geri are married and have AGI of $95,000 and three young children. Geri pays $6,000 a year to day care providers so she can teach a yoga class and do household errands. Geri earns $5,000 teaching the yoga class. How much child and dependent care credit can Jeff and Geri claim? Why?

Which of the following itemized deductions may not be deducted in computing the individual alternative minimum tax?

New York is a community property state.

Glen and Mary have two children, Chad, age 12, and Linda, age 8. For 2015, Chad has $4,000 in net unearned income and Linda has net unearned income of $1,000. If the total parental tax for 2015 is $1,500, how would the tax be allocated between Chad and Linda?

A parent may elect to include a child's income in the parent's return if:

Taxpayers are required to wait until they file their tax return to receive the premium tax credit.

What is the maximum investment income a taxpayer is allowed to have and still be allowed to claim the earned income credit? Why is there an earned income credit in the law?

In determining the amount of the child and dependent care credit, there is a limit of $2,000 on the amount of qualified expenses for one dependent.

A taxpayer with earned income of $50,000 is not eligible to claim the credit for child and dependent care expenses.

Bob and Carol file their tax returns using the married filing jointly status. Their AGI is $132,500. They have two children, ages 11 and 7. How much child tax credit can Bob and Carol claim for their two children?

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses, Part I

Business Income and Expenses, Part II

Itemized Deductions and Other Incentives

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding, Estimated Payments, and Payroll Taxes

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters

Exam 6: Credits and Special Taxes

The earned income credit:

Steve goes to Tri-State University and pays $40,000 in tuition. Steve works a part-time job to pay for his schooling and has an AGI of $17,000. How much is his American Opportunity tax credit?

All taxpayers are required to have minimum essential health coverage.​

In calculating the individual AMT, the tentative minimum tax liability may not exceed the regular tax liability of the taxpayer.

For 2015, which of the following is a tax adjustment or tax preference item for the individual AMT computation?

The use of the earned income credit could result in a taxpayer receiving a refund even though he or she has not paid any income taxes.

Jeff and Geri are married and have AGI of $95,000 and three young children. Geri pays $6,000 a year to day care providers so she can teach a yoga class and do household errands. Geri earns $5,000 teaching the yoga class. How much child and dependent care credit can Jeff and Geri claim? Why?

Which of the following itemized deductions may not be deducted in computing the individual alternative minimum tax?

New York is a community property state.

Glen and Mary have two children, Chad, age 12, and Linda, age 8. For 2015, Chad has $4,000 in net unearned income and Linda has net unearned income of $1,000. If the total parental tax for 2015 is $1,500, how would the tax be allocated between Chad and Linda?

A parent may elect to include a child's income in the parent's return if:

Taxpayers are required to wait until they file their tax return to receive the premium tax credit. ​

What is the maximum investment income a taxpayer is allowed to have and still be allowed to claim the earned income credit? Why is there an earned income credit in the law?

In determining the amount of the child and dependent care credit, there is a limit of $2,000 on the amount of qualified expenses for one dependent.

A taxpayer with earned income of $50,000 is not eligible to claim the credit for child and dependent care expenses.

Bob and Carol file their tax returns using the married filing jointly status. Their AGI is $132,500. They have two children, ages 11 and 7. How much child tax credit can Bob and Carol claim for their two children?

The Individual Income Tax Return

Gross Income and Exclusions

Business Income and Expenses, Part I

Business Income and Expenses, Part II

Itemized Deductions and Other Incentives

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding, Estimated Payments, and Payroll Taxes

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters

All taxpayers are required to have minimum essential health coverage.

Taxpayers are required to wait until they file their tax return to receive the premium tax credit.