Question 1

In computing the alternative minimum taxable income,no deduction is allowed for

Accepted Answer

A)  alimony. 
B)  moving expenses. 
C)  personal exemptions. 
D)  individual retirement account contributions. 
A)  alimony. 
B)  moving expenses. 
C)  personal exemptions. 
D)  individual retirement account contributions.

Question 2

The foreign tax credit is equal to the smaller of foreign taxes paid or accrued in the tax year or the portion of the U.S.income tax liability attributable to the income earned in all foreign countries.

Accepted Answer

A) True 
 B)False

Question 3

Octo Corp.purchases a building for use in its business at a cost of $100,000.The building was built in 1930 and needs substantial work so it can be used.Octo spends $150,000 on qualifying renovations.Octo will earn a rehabilitation credit of

Accepted Answer

A)  $15,000. 
B)  $25,000. 
C)  $5,000. 
D)  $30,000. 
A)  $15,000. 
B)  $25,000. 
C)  $5,000. 
D)  $30,000.

Question 4

During the year,Jim incurs $500,000 of rehabilitation expenditures in connection with a certified historic structure used in his business.The adjusted basis of the structure was $400,000 at the time the rehabilitation began.
a.What is the amount,if any,of his rehabilitation credit for the year?
b.What is the depreciable basis of the rehabilitation expenditures?

Accepted Answer

a.The property qualifies for t

Question 5

Marguerite and Josephus have two children,ages 13 and 10.Their modified AGI is $120,500.What is their child tax credit?

Accepted Answer

A)  $900 
B)  $1,000 
C)  $2,000 
D)  None of the above. 
A)  $900 
B)  $1,000 
C)  $2,000 
D)  None of the above.

Question 6

Which of the following expenditures will qualify as a research expenditure for purposes of the research credit?

Accepted Answer

A)  An ice cream producer develops a new type of packaging that will keep ice cream frozen while driving home from the grocery store. 
B)  An ice cream producer develops a new design on the package that will be more pleasing to the culture of a new market it is entering. 
C)  An ice cream producer develops a new marketing campaign to introduce its brand to a new region of the country it is entering. 
D)  All of the above qualify as research expenditures for the research credit. 
A)  An ice cream producer develops a new type of packaging that will keep ice cream frozen while driving home from the grocery store. 
B)  An ice cream producer develops a new design on the package that will be more pleasing to the culture of a new market it is entering. 
C)  An ice cream producer develops a new marketing campaign to introduce its brand to a new region of the country it is entering. 
D)  All of the above qualify as research expenditures for the research credit.

Question 7

If estimated tax payments equal or exceed 100% of the actual tax liability for the prior year,there is generally (assuming AGI less than or equal to $150,000) no penalty for underpayment of estimated taxes.

Accepted Answer

A) True 
 B)False

Question 8

Bonjour Corp.is a U.S.-based corporation with operations in France.The operations in France generated $200,000 of taxable income whereas worldwide operations generated total taxable income of $2,000,000.Its U.S.tax liability before credits is $680,000.Determine the allowable foreign tax credit assuming taxes paid to France as follows:
a. $40,000.
b. $80,000.

Accepted Answer

Ceiling on application of foreign tax cr

Question 9

Describe the differences between the American Opportunity Tax credit and the Lifetime Learning credit.

Accepted Answer

The American Opportunity Tax Credit (AOT

Question 10

Hawaii,Inc.,began a child care facility for its employees during the year.The corporation incurred the following expenses:
   
What is the amount of Hawaii's credit for employer-provided child care?

Accepted Answer

The credit is ($138,000 × .25)

Question 11

If an individual is an employee and also has self-employment income,the maximum tax base for computing self-employment tax is reduced by the wages that are subject to the FICA tax.

Accepted Answer

A) True 
 B)False

Question 12

Lara started a self-employed consulting business in the last part of the year and earned $60,000 of self- employment earnings.She had been employed as manager in a consulting firm prior to starting her own business and had earned $175,000.
(a) What is Lara's Additional Medicare Tax for 2017,if any?
(b) What is Lara's deduction for AGI for the Additional Medicare Tax?

Accepted Answer

@#IMG-DLM& (b) There is no ded

Question 13

An individual taxpayer who is self-employed and an active investor has qualified for foreign tax credits,nonrefundable personal tax credits and general business credits.Because he knows there are differing limitations on the application of these credits,with resulting interrelated aspects,he wants to know the appropriate order for their application.The appropriate order of the application of these three classes of tax credits is as follow:

Accepted Answer

A)  (1) foreign tax credits; (2) general business credits; (3) nonrefundable personal tax credits. 
B)  (1) general business credits; (2) foreign tax credits; (3) nonrefundable personal tax credits. 
C)  (1) foreign tax credits; (2) nonrefundable personal tax credits; (3) general business credits. 
D)  (1) nonrefundable personal tax credits; (2) foreign tax credits; (3) general business credits. 
A)  (1) foreign tax credits; (2) general business credits; (3) nonrefundable personal tax credits. 
B)  (1) general business credits; (2) foreign tax credits; (3) nonrefundable personal tax credits. 
C)  (1) foreign tax credits; (2) nonrefundable personal tax credits; (3) general business credits. 
D)  (1) nonrefundable personal tax credits; (2) foreign tax credits; (3) general business credits.

Question 14

A couple has filed a joint tax return since they were first married.Because of self-employment income and significant investment income,they have made joint quarterly estimated tax payments.Before year-end the couple has divorced,and they will each file their own individual returns.The estimated payments made jointly while still married earlier in the year will be divided evenly between the two individual returns.

Accepted Answer

A) True 
 B)False

Question 15

In computing AMTI,adjustments are

Accepted Answer

A)  limited. 
B)  added only. 
C)  subtracted only. 
D)  either added or subtracted. 
A)  limited. 
B)  added only. 
C)  subtracted only. 
D)  either added or subtracted.

Question 16

ChocoHealth Inc.is developing new chocolate products providing abundant health benefits at low calorie counts.For the past three years,it spent an average of $500,000 per year on research.ChocoHealth has spent $900,000 on research.The company has elected the simplified credit.For the current year,it will earn a research credit of

Accepted Answer

A)  $54,000. 
B)  $126,000. 
C)  $80,000. 
D)  $91,000. 
A)  $54,000. 
B)  $126,000. 
C)  $80,000. 
D)  $91,000.

Question 17

The child and dependent care credit is available to any parent who pays for child care for a child under age 13.

Accepted Answer

A) True 
 B)False

Question 18

In computing AMTI,tax preference items are

Accepted Answer

A)  excluded. 
B)  added only. 
C)  subtracted only. 
D)  either added or subtracted. 
A)  excluded. 
B)  added only. 
C)  subtracted only. 
D)  either added or subtracted.

Question 19

Jorge has $150,000 of self-employment earnings from a sole proprietorship.Jorge's self-employment tax (rounded) for 2017 is

Accepted Answer

A)  $19,790. 
B)  $22,950. 
C)  $21,194. 
D)  $19,462. 
A)  $19,790. 
B)  $22,950. 
C)  $21,194. 
D)  $19,462.

Question 20

The Lifetime Learning Credit is partially refundable.

Accepted Answer

A) True 
 B)False

In computing the alternative minimum taxable income,no deduction is allowed for

The foreign tax credit is equal to the smaller of foreign taxes paid or accrued in the tax year or the portion of the U.S.income tax liability attributable to the income earned in all foreign countries.

Octo Corp.purchases a building for use in its business at a cost of $100,000.The building was built in 1930 and needs substantial work so it can be used.Octo spends $150,000 on qualifying renovations.Octo will earn a rehabilitation credit of

Marguerite and Josephus have two children,ages 13 and 10.Their modified AGI is $120,500.What is their child tax credit?

Which of the following expenditures will qualify as a research expenditure for purposes of the research credit?

If estimated tax payments equal or exceed 100% of the actual tax liability for the prior year,there is generally (assuming AGI less than or equal to $150,000) no penalty for underpayment of estimated taxes.

Describe the differences between the American Opportunity Tax credit and the Lifetime Learning credit.

Hawaii,Inc.,began a child care facility for its employees during the year.The corporation incurred the following expenses: What is the amount of Hawaii's credit for employer-provided child care?

If an individual is an employee and also has self-employment income,the maximum tax base for computing self-employment tax is reduced by the wages that are subject to the FICA tax.

In computing AMTI,adjustments are

The child and dependent care credit is available to any parent who pays for child care for a child under age 13.

In computing AMTI,tax preference items are

Jorge has $150,000 of self-employment earnings from a sole proprietorship.Jorge's self-employment tax (rounded) for 2017 is

The Lifetime Learning Credit is partially refundable.

An Introduction to Taxation

Determination of Tax

Gross Income: Inclusions

Gross Income: Exclusions

Property Transactions: Capital Gains and Losses

Deductions and Losses

Itemized Deductions

Losses and Bad Debts

Employee Expenses and Deferred Compensation

Depreciation, cost Recovery, amortization, and Depletion

Accounting Periods and Methods

Property Transactions: Nontaxable Exchanges

Property Transactions: Sec1231 and Recapture

Tax Research

Corporations

Partnerships and S Corporations

Taxes and Investment Planning

Filters

Exam 14: Special Tax Computation Methods, tax Credits, and Payment of Tax

In computing the alternative minimum taxable income,no deduction is allowed for

The foreign tax credit is equal to the smaller of foreign taxes paid or accrued in the tax year or the portion of the U.S.income tax liability attributable to the income earned in all foreign countries.

Octo Corp.purchases a building for use in its business at a cost of $100,000.The building was built in 1930 and needs substantial work so it can be used.Octo spends $150,000 on qualifying renovations.Octo will earn a rehabilitation credit of

Marguerite and Josephus have two children,ages 13 and 10.Their modified AGI is $120,500.What is their child tax credit?

Which of the following expenditures will qualify as a research expenditure for purposes of the research credit?

If estimated tax payments equal or exceed 100% of the actual tax liability for the prior year,there is generally (assuming AGI less than or equal to $150,000) no penalty for underpayment of estimated taxes.

Describe the differences between the American Opportunity Tax credit and the Lifetime Learning credit.

Hawaii,Inc.,began a child care facility for its employees during the year.The corporation incurred the following expenses: What is the amount of Hawaii's credit for employer-provided child care?

If an individual is an employee and also has self-employment income,the maximum tax base for computing self-employment tax is reduced by the wages that are subject to the FICA tax.

In computing AMTI,adjustments are

The child and dependent care credit is available to any parent who pays for child care for a child under age 13.

In computing AMTI,tax preference items are

Jorge has $150,000 of self-employment earnings from a sole proprietorship.Jorge's self-employment tax (rounded) for 2017 is

The Lifetime Learning Credit is partially refundable.

An Introduction to Taxation

Determination of Tax

Gross Income: Inclusions

Gross Income: Exclusions

Property Transactions: Capital Gains and Losses

Deductions and Losses

Itemized Deductions

Losses and Bad Debts

Employee Expenses and Deferred Compensation

Depreciation, cost Recovery, amortization, and Depletion

Accounting Periods and Methods

Property Transactions: Nontaxable Exchanges

Property Transactions: Sec1231 and Recapture

Tax Research

Corporations

Partnerships and S Corporations

Taxes and Investment Planning

Filters