Question 1

Which one of the following conditions must be satisfied in order for a married taxpayer to be taxed on only his income if he resides in a community property state?

Accepted Answer

A) The husband and wife must live apart for the entire year. 
B) The husband and wife must live apart for more than half the year. 
C) The husband and wife must be in the process of filing for a divorce. 
D) Only one of the spouses can be working and earning an income. 
E) None of the above. 
A) The husband and wife must live apart for the entire year. 
B) The husband and wife must live apart for more than half the year. 
C) The husband and wife must be in the process of filing for a divorce. 
D) Only one of the spouses can be working and earning an income. 
E) None of the above.

Question 2

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.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following tax credits is not available for the 2013 tax year?

Accepted Answer

A) Foreign tax credits 
B) Earned income credit 
C) Adoption credit 
D) Child and dependent care credit 
E) All of the above are available credits 
A) Foreign tax credits 
B) Earned income credit 
C) Adoption credit 
D) Child and dependent care credit 
E) All of the above are available credits

Question 4

Most states are community property states.

Accepted Answer

A) True 
 B)False

Question 5

For 2013,Beatrice qualifies for the earned income credit.She has one daughter who is 7 years old.Her earned income and adjusted gross income for 2013 are $6,000.
a.Using the EIC tables,calculate the amount of her 2013 earned income credit.
b.Calculate the amount of Beatrice's 2013 earned income credit assuming her earned income for 2013 is $8,200 and her adjusted gross income is $10,000.

Accepted Answer

The answer of For 2013,Beatrice qualifies for the earned income...

Question 6

For the 2013 tax year,Sally,who is divorced,reported the following items of income: Interest income $\quad$$\quad$$\$ 600$
Wages $\quad$$\quad$$\quad \$ 4,000$
Earnings from self-employment $\quad \$ 3,000$ 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 2013,using the tables?

Accepted Answer

A) $1,029 
B) $1,369 
C) $2,389 
D) $2,593 
E) None of the above 
A) $1,029 
B) $1,369 
C) $2,389 
D) $2,593 
E) None of the above

Question 7

In 2013,the child tax credit available to married taxpayers filing jointly is phased out,beginning at:

Accepted Answer

A) $55,000 
B) $75,000 
C) $95,000 
D) $110,000 
A) $55,000 
B) $75,000 
C) $95,000 
D) $110,000

Question 8

The American Opportunity credit

Accepted Answer

A) Is 50 percent of the first $1,200 of tuition and fees paid and 100 percent of the next $1,200. 
B) Is available for 2 years of post-secondary education. 
C) Is fully refundable even if the credit exceeds the tax liability. 
D) Is available for qualifying expenses paid on behalf of the taxpayer and his or her spouse,in addition to those paid for dependents. 
A) Is 50 percent of the first $1,200 of tuition and fees paid and 100 percent of the next $1,200. 
B) Is available for 2 years of post-secondary education. 
C) Is fully refundable even if the credit exceeds the tax liability. 
D) Is available for qualifying expenses paid on behalf of the taxpayer and his or her spouse,in addition to those paid for dependents.

Question 9

Assume Alan's parents make gifts of $10,000 to him every year starting at age one,and that Alan's parents are in the 35 percent income tax bracket,and that Alan is now 15 years old and has $11,700 of interest income for 2013.
a.Calculate the tax on Alan's interest income.
b.Explain why the "kiddie tax" rules are in the law.

Accepted Answer

a.Alan's tax will be $0 on the first $1,

Question 10

In the case of the adoption of a child who is not a U.S.citizen or resident of the U.S. ,the credit for qualified adoption expenses is available:

Accepted Answer

A) In the first year the expenses are paid. 
B) Each year expenses are paid. 
C) In the last year expenses are paid. 
D) In the year the adoption becomes final. 
A) In the first year the expenses are paid. 
B) Each year expenses are paid. 
C) In the last year expenses are paid. 
D) In the year the adoption becomes final.

Question 11

Net unearned income of certain minor children is taxed at their parents' tax rates.

Accepted Answer

A) True 
 B)False

Question 12

Marion has an 11-year-old daughter.Please calculate her child and dependent care credit under these two alternatives:
a.Marion pays $4,000 a year in day care costs.Her salary is $30,000.
b.Marion pays $8,000 a year in day care costs.Her salary is $80,000.

Accepted Answer

a.$810,27% of $3,000

Question 13

To be eligible for the earned income credit for 2013,a taxpayer must have a "qualifying child."

Accepted Answer

A) True 
 B)False

Question 14

Denice is divorced and files a single tax return claiming her two children,ages 7 and 9,as dependents.Her AGI for 2013 is $79,500.Denice's Child Credit for 2013 is:

Accepted Answer

A) $2,000 
B) $250 
C) $1,000 
D) $750 
E) $1,750 
A) $2,000 
B) $250 
C) $1,000 
D) $750 
E) $1,750

Question 15

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

Accepted Answer

A) The standard deduction 
B) Personal and dependency exemptions 
C) State income taxes,property taxes,and all other taxes deducted on Schedule A 
D) Mortgage interest from the acquisition of a residence costing less than $1 million 
E) Miscellaneous itemized deductions taken on Schedule A 
A) The standard deduction 
B) Personal and dependency exemptions 
C) State income taxes,property taxes,and all other taxes deducted on Schedule A 
D) Mortgage interest from the acquisition of a residence costing less than $1 million 
E) Miscellaneous itemized deductions taken on Schedule A

Question 16

Jessica and Robert have two young children.They have $7,000 of qualified child care expenses and an AGI of $24,000 in 2013.What is their allowable child care credit?

Accepted Answer

A) $7,000 
B) $6,000 
C) $2,100 
D) $1,800 
E) $900 
A) $7,000 
B) $6,000 
C) $2,100 
D) $1,800 
E) $900

Question 17

John graduates from high school in 2013 and enrolls in a private college in the fall.His parents pay
$10,000 for his tuition and fees.
a.Assuming John's parents have AGI of $46,000,what is the American Opportunity credit they can claim for John? Explain.
b.Assuming John's parents have AGI of $170,000,what is the American Opportunity credit they can claim for John? Explain.

Accepted Answer

a.$2,500.John's parents qualify for the

Question 18

For 2013,the maximum amount of expenses that qualify for the child and dependent care credit is the same for three dependents as it is for two dependents.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is not an adjustment or tax preference item for 2013 for purposes of the individual alternative minimum tax AMT)?

Accepted Answer

A) State income tax refunds 
B) Certain passive losses 
C) Miscellaneous itemized deductions 
D) Cash charitable contributions 
E) All of the above are adjustment or tax preference items for AMT 
A) State income tax refunds 
B) Certain passive losses 
C) Miscellaneous itemized deductions 
D) Cash charitable contributions 
E) All of the above are adjustment or tax preference items for AMT

Question 20

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

Which one of the following conditions must be satisfied in order for a married taxpayer to be taxed on only his income if he resides in a community property state?

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.

Which of the following tax credits is not available for the 2013 tax year?

Most states are community property states.

In 2013,the child tax credit available to married taxpayers filing jointly is phased out,beginning at:

The American Opportunity credit

In the case of the adoption of a child who is not a U.S.citizen or resident of the U.S. ,the credit for qualified adoption expenses is available:

Net unearned income of certain minor children is taxed at their parents' tax rates.

Marion has an 11-year-old daughter.Please calculate her child and dependent care credit under these two alternatives: a.Marion pays $4,000 a year in day care costs.Her salary is $30,000. b.Marion pays $8,000 a year in day care costs.Her salary is $80,000.

To be eligible for the earned income credit for 2013,a taxpayer must have a "qualifying child."

Denice is divorced and files a single tax return claiming her two children,ages 7 and 9,as dependents.Her AGI for 2013 is $79,500.Denice's Child Credit for 2013 is:

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

Jessica and Robert have two young children.They have $7,000 of qualified child care expenses and an AGI of $24,000 in 2013.What is their allowable child care credit?

For 2013,the maximum amount of expenses that qualify for the child and dependent care credit is the same for three dependents as it is for two dependents.

Which of the following is not an adjustment or tax preference item for 2013 for purposes of the individual alternative minimum tax AMT)?

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.

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

Which one of the following conditions must be satisfied in order for a married taxpayer to be taxed on only his income if he resides in a community property state?

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.

Which of the following tax credits is not available for the 2013 tax year?

Most states are community property states.

In 2013,the child tax credit available to married taxpayers filing jointly is phased out,beginning at:

The American Opportunity credit

In the case of the adoption of a child who is not a U.S.citizen or resident of the U.S. ,the credit for qualified adoption expenses is available:

Net unearned income of certain minor children is taxed at their parents' tax rates.

Marion has an 11-year-old daughter.Please calculate her child and dependent care credit under these two alternatives: a.Marion pays $4,000 a year in day care costs.Her salary is $30,000. b.Marion pays $8,000 a year in day care costs.Her salary is $80,000.

To be eligible for the earned income credit for 2013,a taxpayer must have a "qualifying child."

Denice is divorced and files a single tax return claiming her two children,ages 7 and 9,as dependents.Her AGI for 2013 is $79,500.Denice's Child Credit for 2013 is:

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

Jessica and Robert have two young children.They have $7,000 of qualified child care expenses and an AGI of $24,000 in 2013.What is their allowable child care credit?

For 2013,the maximum amount of expenses that qualify for the child and dependent care credit is the same for three dependents as it is for two dependents.

Which of the following is not an adjustment or tax preference item for 2013 for purposes of the individual alternative minimum tax AMT)?

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.

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