Question 1

Unearned income of a 16-year-old child may be taxed at his or her parents' income tax rate.

Accepted Answer

A) True 
 B)False

Question 2

Although the alternative minimum tax (AMT) is meant to prevent high-income taxpayers from using tax shelters to avoid paying tax, why might married taxpayers with several children and jobs resulting in high unreimbursed employee business expenses find themselves paying AMT?

Accepted Answer

To compute the AMT, deductions for perso

Question 3

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 4

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 5

​To qualify for the additional child tax credit

Accepted Answer

A) ​the typical child tax credit must be limited by tax liability 
B) ​the taxpayer must have earned income of over $3,000 
C) ​the taxpayer must have at least one qualifying child 
D) ​all of the above are required to qualify for the additional child tax credit 
A) ​the typical child tax credit must be limited by tax liability 
B) ​the taxpayer must have earned income of over $3,000 
C) ​the taxpayer must have at least one qualifying child 
D) ​all of the above are required to qualify for the additional child tax credit

Question 6

Denise is divorced and files a single tax return claiming her two children, ages 7 and 9, as dependents. Her AGI for 2016 is $81,500. Denise's child tax credit for 2016 is:

Accepted Answer

A) $0 
B) $350 
C) $1,000 
D) $1,650 
E) $2,000 
A) $0 
B) $350 
C) $1,000 
D) $1,650 
E) $2,000

Question 7

Curly and Rita are married, file a joint return, and have two dependent children, ages 11 and 13. Their AGI is $117,000. By how much is their child credit reduced in 2016?

Accepted Answer

A) $0 
B) $300 
C) $350 
D) $700 
E) $7,000 
A) $0 
B) $300 
C) $350 
D) $700 
E) $7,000

Question 8

Keith has a 2016 tax liability of $2,250 before taking into account his American Opportunity tax credit. He paid $2,600 in qualifying expenses, was a full-time student, was not claimed as a dependent on his parents' return, and his American Opportunity tax credit was not subject to phase-out. What is the amount of his American Opportunity tax credit allowed?

Accepted Answer

A) $0 
B) $2,150 
C) $2,250 
D) $2,600 
E) $4,000 
A) $0 
B) $2,150 
C) $2,250 
D) $2,600 
E) $4,000

Question 9

The child tax credit is not available for children ages 17 and older.

Accepted Answer

A) True 
 B)False

Question 10

a.Norm and Linda are married, file a joint return, and have one 5-year-old child.Their adjusted gross income is $136,000.What is their child credit for the current year?
b.If Norm and Linda had a 3-year-old as well as the 5-year-old and an 18-year-old from Linda's first marriage, what would their child tax credit be for the current year?
b.above, how many qualifying children do Norm and Linda have? Explain.
c.In

Accepted Answer

a. $0. They are above the phase-out limi

Question 11

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 2016.
​
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 12

For the 2016 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 2016, using the tables?

Accepted Answer

A) $503 
B) $1,369 
C) $2,423 
D) $2,627 
E) None of the above 
A) $503 
B) $1,369 
C) $2,423 
D) $2,627 
E) None of the above

Question 13

Jasmine is a single marketing manager with a college degree. She continually updates her marketing knowledge and gets fresh ideas by taking classes at the local community college. This year she spent $1,500 on course tuition and fees. If Jasmine has AGI of $57,000, how much lifetime learning credit can she claim on her tax return? Explain.

Accepted Answer

$240. Jasmine's income is too high to qu

Question 14

To be eligible for the earned income credit for 2016, a taxpayer must have a "qualifying child."

Accepted Answer

A) True 
 B)False

Question 15

All taxpayers are required to have minimum essential health coverage.​

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is not an adjustment or tax preference item for 2016 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 17

Choose the correct statement: ​

Accepted Answer

A) A taxayer may receive a 30-percent credit for installing energy-efficient window shades. 
B) A taxpayer may receive a 30-percent credit for installing a windmill, which generates electricity, at his vacation home. 
C) A taxpayer may receive a 30-percent credit for installing a solar water-heating panel for his swimming pool. 
D) A taxpayer may receive a 30-percent credit for the purchase of a plug-in electric vehicle. 
A) A taxayer may receive a 30-percent credit for installing energy-efficient window shades. 
B) A taxpayer may receive a 30-percent credit for installing a windmill, which generates electricity, at his vacation home. 
C) A taxpayer may receive a 30-percent credit for installing a solar water-heating panel for his swimming pool. 
D) A taxpayer may receive a 30-percent credit for the purchase of a plug-in electric vehicle.

Question 18

Jeff and Geri are married and have AGI of $95,000 and three young children. Geri pays $6,000 a year to day care providers so she can teach a yoga class and do household errands. Geri earns $5,000 teaching the yoga class. How much child and dependent care credit can Jeff and Geri claim? Why?

Accepted Answer

$1,000, or $5,000 × 20%. Geri's earned i

Question 19

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 20

​Avery is a single 26 year old graduate student at State University with no children. She is a US citizen with a valid Social Security number. Her only income is from a part-time job on campus from which she earned wages of $6,000. Avery qualifies for the earned income credit.

Accepted Answer

A) True 
 B)False

Unearned income of a 16-year-old child may be taxed at his or her parents' income tax rate.

Although the alternative minimum tax (AMT) is meant to prevent high-income taxpayers from using tax shelters to avoid paying tax, why might married taxpayers with several children and jobs resulting in high unreimbursed employee business expenses find themselves paying AMT?

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?

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:

To qualify for the additional child tax credit

Denise is divorced and files a single tax return claiming her two children, ages 7 and 9, as dependents. Her AGI for 2016 is $81,500. Denise's child tax credit for 2016 is:

Curly and Rita are married, file a joint return, and have two dependent children, ages 11 and 13. Their AGI is $117,000. By how much is their child credit reduced in 2016?

The child tax credit is not available for children ages 17 and older.

For the 2016 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 2016, using the tables?

To be eligible for the earned income credit for 2016, a taxpayer must have a "qualifying child."

All taxpayers are required to have minimum essential health coverage.

Which of the following is not an adjustment or tax preference item for 2016 for purposes of the individual alternative minimum tax (AMT)?

Choose the correct statement:

Jeff and Geri are married and have AGI of $95,000 and three young children. Geri pays $6,000 a year to day care providers so she can teach a yoga class and do household errands. Geri earns $5,000 teaching the yoga class. How much child and dependent care credit can Jeff and Geri claim? Why?

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.

Avery is a single 26 year old graduate student at State University with no children. She is a US citizen with a valid Social Security number. Her only income is from a part-time job on campus from which she earned wages of $6,000. Avery qualifies for the earned income credit.

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

Unearned income of a 16-year-old child may be taxed at his or her parents' income tax rate.

Although the alternative minimum tax (AMT) is meant to prevent high-income taxpayers from using tax shelters to avoid paying tax, why might married taxpayers with several children and jobs resulting in high unreimbursed employee business expenses find themselves paying AMT?

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?

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:

​To qualify for the additional child tax credit

Denise is divorced and files a single tax return claiming her two children, ages 7 and 9, as dependents. Her AGI for 2016 is $81,500. Denise's child tax credit for 2016 is:

Curly and Rita are married, file a joint return, and have two dependent children, ages 11 and 13. Their AGI is $117,000. By how much is their child credit reduced in 2016?

The child tax credit is not available for children ages 17 and older.

For the 2016 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 2016, using the tables?

To be eligible for the earned income credit for 2016, a taxpayer must have a "qualifying child."

All taxpayers are required to have minimum essential health coverage.​

Which of the following is not an adjustment or tax preference item for 2016 for purposes of the individual alternative minimum tax (AMT)?

Choose the correct statement: ​

Jeff and Geri are married and have AGI of $95,000 and three young children. Geri pays $6,000 a year to day care providers so she can teach a yoga class and do household errands. Geri earns $5,000 teaching the yoga class. How much child and dependent care credit can Jeff and Geri claim? Why?

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.

​Avery is a single 26 year old graduate student at State University with no children. She is a US citizen with a valid Social Security number. Her only income is from a part-time job on campus from which she earned wages of $6,000. Avery qualifies for the earned income credit.

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

To qualify for the additional child tax credit

All taxpayers are required to have minimum essential health coverage.

Choose the correct statement:

Avery is a single 26 year old graduate student at State University with no children. She is a US citizen with a valid Social Security number. Her only income is from a part-time job on campus from which she earned wages of $6,000. Avery qualifies for the earned income credit.