Exam 6: Credits and Special Taxes

For the 2015 tax year, Sally, who is single, reported the following items of income: She maintains a household for herself and her 1-year-old son who qualifies as her dependent. What is the earned income credit available to her for 2015, using the tables?

Edward has business operations in Country F and Country G. He pays tax to Country F of $12,000 on $30,000 of income and pays tax to Country G of $4,000 on $10,000 of income. In addition to the income from Country F and Country G, Edward has $100,000 of income from U.S. sources and a total U.S. tax liability, before the foreign tax credit, of $42,000. ​ What amount of foreign tax credit may Edward claim on his U.S. tax return?

​Which of the following is not a requirement to claim an earned income credit?

Which of the common deductions below are allowed for regular tax purposes but not for AMT purposes?

Which of the common deductions below are allowed for both regular tax purposes and for AMT purposes?

An individual may claim both a credit and an exclusion from income in connection with the adoption of an eligible child, but may not claim both a credit and an exclusion for the same expense.

​Margo and her spouse have health insurance for the entire year through the state health care exchange. Margo will need to pay her spouse's individual shared responsibility.

Assume Alan's parents make gifts of $10,000 to him every year starting at age one, Alan's parents are in the 35 percent income tax bracket, and Alan is now 15 years old and has $11,700 of interest income for 2015. ​ a.Calculate the tax on Alan's interest income. b.Explain why the "kiddie tax" rules are in the law.

Explain what type of educational expenses qualify for the American Opportunity tax credit and what type of educational expenses qualify for the lifetime learning credit.