Question 1

Child care payments to a relative are not eligible for the credit for child and dependent care expenses if the relative is a child (under age 19) of the taxpayer.

Accepted Answer

A) True 
 B)False

Question 2

During the year,Green Corporation (a U.S.corporation) has U.S.-source income of $750,000 and foreign income of $500,000.The foreign-source income generates foreign income taxes of $240,000.The U.S.income tax before the foreign tax credit is $425,000.Green Corporation's foreign tax credit is:

Accepted Answer

A) $170,000. 
B) $240,000. 
C) $425,000. 
D) $500,000. 
E) None of the above. 
A) $170,000. 
B) $240,000. 
C) $425,000. 
D) $500,000. 
E) None of the above.

Question 3

Kevin and Sue have two children,ages 8 and 14.They spend $6,200 per year on eligible employment related expenses for the care of their children after school.Kevin earned a salary of $20,000 and Sue earned a salary of $18,000.What is the amount of the credit for child and dependent care expenses?

Accepted Answer

A) $690 
B) $713 
C) $1,380 
D) $1,426 
E) None of the above 
A) $690 
B) $713 
C) $1,380 
D) $1,426 
E) None of the above

Question 4

The tax benefit received from a tax credit is never affected by the tax rate of the taxpayer.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following correctly describes the tax credit for rehabilitation expenditures?

Accepted Answer

A) The cost of enlarging any existing business building is a qualifying expenditure. 
B) The cost of facilities related to the building (e.g. ,a parking lot) is a qualifying expenditure. 
C) No recapture provisions apply. 
D) No credit is allowed for the rehabilitation of personal use property. 
E) None of the above. 
A) The cost of enlarging any existing business building is a qualifying expenditure. 
B) The cost of facilities related to the building (e.g. ,a parking lot) is a qualifying expenditure. 
C) No recapture provisions apply. 
D) No credit is allowed for the rehabilitation of personal use property. 
E) None of the above.

Question 6

Unused foreign tax credits can be carried back three years and forward fifteen years.

Accepted Answer

A) True 
 B)False

Question 7

Steve records a tentative general business credit of $110,000 for the current year.His net regular tax liability before the general business credit is $125,000,and his tentative minimum tax is $100,000.Compute Steve's allowable general business credit for the year.

Accepted Answer

Steve's allowable general business credi

Question 8

Rick spends $750,000 to build a qualified low-income housing project,which is placed in service on January 1,2015.He financed the project using his personal funds.What is the amount of the low-income housing credit that Rick may claim in 2015 (assuming a rate of 7.40%)? What is the total amount of the credit that Rick may claim as a result of the $750,000 expenditure?

Accepted Answer

Rick may claim a credit of $55

Question 9

Which of the following best describes the treatment applicable to unused business credits?

Accepted Answer

A) Unused amounts are carried forward indefinitely. 
B) Unused amounts are first carried back one year and then forward for 20 years. 
C) Unused amounts are first carried back one year and then forward for 10 years. 
D) Unused amounts are first carried back three years and then carried forward for 15 years. 
E) None of the above. 
A) Unused amounts are carried forward indefinitely. 
B) Unused amounts are first carried back one year and then forward for 20 years. 
C) Unused amounts are first carried back one year and then forward for 10 years. 
D) Unused amounts are first carried back three years and then carried forward for 15 years. 
E) None of the above.

Question 10

During 2015,Barry (who is single and has no children) earned a salary of $13,000.He is age 30.His earned income credit for the year is:

Accepted Answer

A) $0. 
B) $139. 
C) $364. 
D) $503. 
E) None of the above. 
A) $0. 
B) $139. 
C) $364. 
D) $503. 
E) None of the above.

Question 11

Certain high-income individuals are subject to three additional Medicare taxes-on wages,unearned income,and tax credits claimed.

Accepted Answer

A) True 
 B)False

Question 12

Dabney and Nancy are married,both gainfully employed,and have two children who are 3 and 6 years old.Dabney's salary is $35,000 while Nancy's salary is $40,000.During the year,they spend $7,000 for child care expenses that are required so both of them can work outside of the home.Calculate the credit for child and dependent care expenses.

Accepted Answer

For two or more qualifying children,the

Question 13

The American Opportunity credit is available per eligible student,while the lifetime learning credit is calculated per taxpayer.

Accepted Answer

A) True 
 B)False

Question 14

All foreign taxes qualify for the foreign tax credit.

Accepted Answer

A) True 
 B)False

Question 15

The maximum credit for child and dependent care expenses is $2,100 if only one spouse is employed and the other spouse is a full-time student.

Accepted Answer

A) True 
 B)False

Question 16

Which,if any,of the following correctly describes the research activities credit?

Accepted Answer

A) The research activities credit is the greater of the incremental research credit,the basic research credit,or the energy research credit. 
B) If the research activities credit is claimed,no deduction is allowed for research and experimentation expenditures. 
C) The credit is not available for research conducted outside the United States. 
D) All corporations qualify for the basic research credit. 
E) None of the above. 
A) The research activities credit is the greater of the incremental research credit,the basic research credit,or the energy research credit. 
B) If the research activities credit is claimed,no deduction is allowed for research and experimentation expenditures. 
C) The credit is not available for research conducted outside the United States. 
D) All corporations qualify for the basic research credit. 
E) None of the above.

Question 17

In computing the foreign tax credit,the greater of the foreign income taxes paid or the overall limitation is allowed.

Accepted Answer

A) True 
 B)False

Question 18

Molly has generated general business credits over the years that have not been utilized.The amounts generated and not utilized follow: 2011 $2,500 2012 7,500 2013 5,000 2014 4,000 ​ In the current year,2015,her business generates an additional $15,000 general business credit.In 2015,based on her tax liability before credits,she can utilize a general business credit of up to $20,000.After utilizing the carryforwards and the current year credits,how much of the general business credit generated in 2015 is available for future years?

Accepted Answer

A) $0. 
B) $1,000. 
C) $14,000. 
D) $15,000. 
E) None of the above. 
A) $0. 
B) $1,000. 
C) $14,000. 
D) $15,000. 
E) None of the above.

Exam 12: Tax Credits and Payments

Child care payments to a relative are not eligible for the credit for child and dependent care expenses if the relative is a child (under age 19) of the taxpayer.

During the year,Green Corporation (a U.S.corporation) has U.S.-source income of $750,000 and foreign income of $500,000.The foreign-source income generates foreign income taxes of $240,000.The U.S.income tax before the foreign tax credit is $425,000.Green Corporation's foreign tax credit is:

Kevin and Sue have two children,ages 8 and 14.They spend $6,200 per year on eligible employment related expenses for the care of their children after school.Kevin earned a salary of $20,000 and Sue earned a salary of $18,000.What is the amount of the credit for child and dependent care expenses?

The tax benefit received from a tax credit is never affected by the tax rate of the taxpayer.

Which of the following correctly describes the tax credit for rehabilitation expenditures?

Unused foreign tax credits can be carried back three years and forward fifteen years.

Steve records a tentative general business credit of $110,000 for the current year.His net regular tax liability before the general business credit is $125,000,and his tentative minimum tax is $100,000.Compute Steve's allowable general business credit for the year.

Which of the following best describes the treatment applicable to unused business credits?

During 2015,Barry (who is single and has no children) earned a salary of $13,000.He is age 30.His earned income credit for the year is:

Certain high-income individuals are subject to three additional Medicare taxes-on wages,unearned income,and tax credits claimed.

The American Opportunity credit is available per eligible student,while the lifetime learning credit is calculated per taxpayer.

All foreign taxes qualify for the foreign tax credit.

The maximum credit for child and dependent care expenses is $2,100 if only one spouse is employed and the other spouse is a full-time student.

Which,if any,of the following correctly describes the research activities credit?

In computing the foreign tax credit,the greater of the foreign income taxes paid or the overall limitation is allowed.

An Introduction to Taxation and Understanding the Tax Law

Working With the Tax Law

Computing the Tax

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, cost Recovery, amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Property Transactions: Determination of Gain or Loss, basis Considerations, and Nontaxabl

Property Transactions: Capital Gains and Losses, section 1231 and Recapture Provisions

Alternative Minimum Tax

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations

Partnerships

S Corporations

Exempt Entities

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

Family Tax Planning

Income Taxation of Trusts and Estates

Filters