Question 1

The earned income credit, a form of a negative income tax, is a refundable credit.

Accepted Answer

A) True 
 B)False

Question 2

Nonrefundable credits are those that reduce the taxpayer's tax liability but are not paid when the amount of the credit (or credits) exceeds the taxpayer's tax liability.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

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 
A) $690 
B) $713 
C) $1,380 
D) $1,426

Question 5

Cardinal Company incurs $800,000 during the year to construct a facility that will be used exclusively for the care of its employees' pre-school age children during normal working hours. Assuming Cardinal claims the credit for employer-provided child care this year, its basis in the newly constructed facility is $640,000.

Accepted Answer

A) True 
 B)False

Question 6

If a taxpayer chooses to claim a foreign tax credit, those foreign income taxes paid can also be claimed as a deduction.

Accepted Answer

A) True 
 B)False

Question 7

In 2016, Juan and Juanita incur $9,800 in legal and adoption fees directly related to the adoption of an infant son born in a nearby state. Over the next year, they incur another $4,500 of adoption expenses. The adoption becomes final in 2017. Which of the following choices properly reflects the amounts and years in which the adoption expenses credit is available.2016 2017

Accepted Answer

A) $9,800 $ 4,500 
B) None $13,570 
C) None $14,300 
D) $9,800 $ 3,770 
A) $9,800 $ 4,500 
B) None $13,570 
C) None $14,300 
D) $9,800 $ 3,770

Question 8

Julia is 30 years old, unmarried with a 9 year-old daughter, and has earnings during 2017 of $19,700. Does she qualify for the earned income credit? If so, calculate the amount of credit that is available to her.

Accepted Answer

The answer of Julia is 30 years old, unmarried with...

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

Qualifying tuition expenses paid from the proceeds of a tax-exempt scholarship do not give rise to an education tax credit.

Accepted Answer

A) True 
 B)False

Question 11

Golden Corporation is an eligible small business for purposes of the disabled access credit. During the year, Golden makes the following expenditures on a structure originally placed in service in 1988.
​
   In addition, $8,000 was expended by Golden on a building originally placed in service in the current year to ensure easy accessibility by disabled individuals. Calculate the amount of the disabled access credit available to Golden Corporation.

Accepted Answer

​
​
 @#IMG-DLM& The expenditures of $8,000 incurre

Question 12

For purposes of computing the credit for child and dependent care expenses, the qualifying employment-related expenses are limited to an individual's actual or deemed earned income.

Accepted Answer

A) True 
 B)False

Question 13

The ceiling amounts and percentages for 2017 for the two portions of the self-employment tax are: ​
Social Security portion Medicare portion

Accepted Answer

A) $127,200; 12.4% Unlimited; 2.9% 
B) $127,200; 15.3% Unlimited; 2.9% 
C) $118,500; 12.4% Unlimited; 2.9% 
D) $118,500; 2.9% Unlimited; 13.3% 
A) $127,200; 12.4% Unlimited; 2.9% 
B) $127,200; 15.3% Unlimited; 2.9% 
C) $118,500; 12.4% Unlimited; 2.9% 
D) $118,500; 2.9% Unlimited; 13.3%

Question 14

The low-income housing credit is available to low-income tenants who reside in qualifying low-income housing.

Accepted Answer

A) True 
 B)False

Question 15

Amber is in the process this year of renovating the office building (placed in service in 1976) used by her business. Because of current Federal Regulations that require the structure to be accessible to handicapped individuals, she incurs an additional $11,000 for various features, such as ramps and widened doorways, to make her office building more accessible. The $11,000 incurred will produce a disabled access credit of what amount?

Accepted Answer

A) $0 
B) $5,000 
C) $5,125 
D) $5,500 
A) $0 
B) $5,000 
C) $5,125 
D) $5,500

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

Unless a taxpayer is disabled, the tax credit for the elderly or disabled is available only if the taxpayer is at least 59 1/2 years old.

Accepted Answer

A) True 
 B)False

Question 18

The purpose of the work opportunity tax credit is to encourage employers to hire individuals from specified target groups traditionally subject to high rates of unemployment.

Accepted Answer

A) True 
 B)False

Question 19

All taxpayers are eligible to take the basic research credit.

Accepted Answer

A) True 
 B)False

Question 20

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

The earned income credit, a form of a negative income tax, is a refundable credit.

Nonrefundable credits are those that reduce the taxpayer's tax liability but are not paid when the amount of the credit (or credits) exceeds the taxpayer's tax liability.

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

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?

If a taxpayer chooses to claim a foreign tax credit, those foreign income taxes paid can also be claimed as a deduction.

Julia is 30 years old, unmarried with a 9 year-old daughter, and has earnings during 2017 of $19,700. Does she qualify for the earned income credit? If so, calculate the amount of credit that is available to her.

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

Qualifying tuition expenses paid from the proceeds of a tax-exempt scholarship do not give rise to an education tax credit.

For purposes of computing the credit for child and dependent care expenses, the qualifying employment-related expenses are limited to an individual's actual or deemed earned income.

The ceiling amounts and percentages for 2017 for the two portions of the self-employment tax are: Social Security portion Medicare portion

The low-income housing credit is available to low-income tenants who reside in qualifying low-income housing.

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

Unless a taxpayer is disabled, the tax credit for the elderly or disabled is available only if the taxpayer is at least 59 1/2 years old.

The purpose of the work opportunity tax credit is to encourage employers to hire individuals from specified target groups traditionally subject to high rates of unemployment.

All taxpayers are eligible to take the basic research 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.

An Introduction to Taxation and Understanding Federal Tax Law

Working With the Tax Law

Tax Formula and Tax Determination; an Overview of Property Transactions

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

Alternative Minimum Tax

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters

Exam 13: Tax Credits and Payment Procedures

The earned income credit, a form of a negative income tax, is a refundable credit.

Nonrefundable credits are those that reduce the taxpayer's tax liability but are not paid when the amount of the credit (or credits) exceeds the taxpayer's tax liability.

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

If a taxpayer chooses to claim a foreign tax credit, those foreign income taxes paid can also be claimed as a deduction.

Julia is 30 years old, unmarried with a 9 year-old daughter, and has earnings during 2017 of $19,700. Does she qualify for the earned income credit? If so, calculate the amount of credit that is available to her.

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

Qualifying tuition expenses paid from the proceeds of a tax-exempt scholarship do not give rise to an education tax credit.

For purposes of computing the credit for child and dependent care expenses, the qualifying employment-related expenses are limited to an individual's actual or deemed earned income.

The ceiling amounts and percentages for 2017 for the two portions of the self-employment tax are: ​ Social Security portion Medicare portion

The low-income housing credit is available to low-income tenants who reside in qualifying low-income housing.

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

Unless a taxpayer is disabled, the tax credit for the elderly or disabled is available only if the taxpayer is at least 59 1/2 years old.

The purpose of the work opportunity tax credit is to encourage employers to hire individuals from specified target groups traditionally subject to high rates of unemployment.

All taxpayers are eligible to take the basic research 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.

An Introduction to Taxation and Understanding Federal Tax Law

Working With the Tax Law

Tax Formula and Tax Determination; an Overview of Property Transactions

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

Alternative Minimum Tax

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters

The ceiling amounts and percentages for 2017 for the two portions of the self-employment tax are: Social Security portion Medicare portion