Question 1

All taxpayers are eligible to take the basic research credit.

Accepted Answer

A) True 
 B)False

Question 2

Green Company,in the renovation of its building,incurs $9,000 of expenditures that qualify for the disabled access credit.The disabled access credit is:

Accepted Answer

A) $8,750. 
B) $4,500. 
C) $4,375. 
D) $4,250. 
E) None of the above. 
A) $8,750. 
B) $4,500. 
C) $4,375. 
D) $4,250. 
E) None of the above.

Question 3

Qualified rehabilitation expenditures include the cost of acquiring the building,but not the cost of acquiring the land.

Accepted Answer

A) True 
 B)False

Question 4

A taxpayer who qualifies for the low-income housing credit claims the credit over a 20-year period.

Accepted Answer

A) True 
 B)False

Question 5

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 6

The purpose of the tax credit for rehabilitation expenditures is to encourage the relocation of businesses from older,economically distressed areas (i.e.,inner city) to newer locations.

Accepted Answer

A) True 
 B)False

Question 7

Black Company paid wages of $180,000,of which $40,000 was qualified wages for the work opportunity tax credit under the general rules.Black Company's deduction for wages for the year is:

Accepted Answer

A) $140,000. 
B) $164,000. 
C) $166,000. 
D) $180,000. 
E) None of the above. 
A) $140,000. 
B) $164,000. 
C) $166,000. 
D) $180,000. 
E) None of the above.

Question 8

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 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

Roger is considering making a $6,000 investment in a venture that its promoter promises will generate immediate tax benefits for him.Roger,who does not anticipate itemizing his deductions,is in the 30% marginal income tax bracket.If the investment is of a type that produces a tax credit of 40% of the amount of the expenditure,by how much will Roger's tax liability decline because of the investment?

Accepted Answer

A) $0 
B) $1,800 
C) $2,200 
D) $2,400 
E) None of the above 
A) $0 
B) $1,800 
C) $2,200 
D) $2,400 
E) None of the above

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Describe the withholding requirements applicable to employers.

Accepted Answer

Employers are required to withhold emplo

Question 13

Juan refuses to give the bank where he maintains a savings account his Social Security number.Juan is subject to backup withholding for the interest earned on the savings account.

Accepted Answer

A) True 
 B)False

Question 14

Employers are encouraged by the work opportunity tax credit to hire individuals who have been long-term recipients of family assistance welfare benefits.

Accepted Answer

A) True 
 B)False

Question 15

All foreign taxes qualify for the foreign tax credit.

Accepted Answer

A) True 
 B)False

Question 16

The work opportunity tax credit is available only for wages paid to qualifying individuals during their first year of employment.

Accepted Answer

A) True 
 B)False

Question 17

The child tax credit is based on the number of the taxpayer's qualifying children under age 17.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements is true regarding the education tax credits?

Accepted Answer

A) The lifetime learning credit is available for qualifying tuition and related expenses incurred by students pursuing only graduate degrees. 
B) The American Opportunity credit permits a maximum credit of 20% of qualified expenses up to $10,000 per year. 
C) The American Opportunity credit is calculated per taxpayer, while the lifetime learning credit is available per eligible student. 
D) Continuing education expenses do not qualify for either education credit. 
E) None of the above statements is true. 
A) The lifetime learning credit is available for qualifying tuition and related expenses incurred by students pursuing only graduate degrees. 
B) The American Opportunity credit permits a maximum credit of 20% of qualified expenses up to $10,000 per year. 
C) The American Opportunity credit is calculated per taxpayer, while the lifetime learning credit is available per eligible student. 
D) Continuing education expenses do not qualify for either education credit. 
E) None of the above statements is true.

Question 19

In describing FICA taxes,which (if any) of the following statements is incorrect?

Accepted Answer

A) The base amounts for 2018 probably will increase from the 2017 amounts. 
B) The base amounts for the Social Security and Medicare portions are the same. 
C) If both spouses work, excess FICA taxes need not result. 
D) Excess FICA taxes can be claimed as an income tax credit. 
A) The base amounts for 2018 probably will increase from the 2017 amounts. 
B) The base amounts for the Social Security and Medicare portions are the same. 
C) If both spouses work, excess FICA taxes need not result. 
D) Excess FICA taxes can be claimed as an income tax credit.

Question 20

Explain the purpose of the disabled access credit and describe the general characteristics of its computation.

Accepted Answer

The disabled access credit is designed t

Exam 12: Tax Credits and Payments

All taxpayers are eligible to take the basic research credit.

Green Company,in the renovation of its building,incurs $9,000 of expenditures that qualify for the disabled access credit.The disabled access credit is:

Qualified rehabilitation expenditures include the cost of acquiring the building,but not the cost of acquiring the land.

A taxpayer who qualifies for the low-income housing credit claims the credit over a 20-year period.

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

The purpose of the tax credit for rehabilitation expenditures is to encourage the relocation of businesses from older,economically distressed areas (i.e.,inner city) to newer locations.

Black Company paid wages of $180,000,of which $40,000 was qualified wages for the work opportunity tax credit under the general rules.Black Company's deduction for wages for the year is:

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

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

Describe the withholding requirements applicable to employers.

Juan refuses to give the bank where he maintains a savings account his Social Security number.Juan is subject to backup withholding for the interest earned on the savings account.

Employers are encouraged by the work opportunity tax credit to hire individuals who have been long-term recipients of family assistance welfare benefits.

All foreign taxes qualify for the foreign tax credit.

The work opportunity tax credit is available only for wages paid to qualifying individuals during their first year of employment.

The child tax credit is based on the number of the taxpayer's qualifying children under age 17.

Which of the following statements is true regarding the education tax credits?

In describing FICA taxes,which (if any) of the following statements is incorrect?

Explain the purpose of the disabled access credit and describe the general characteristics of its computation.

An Introduction to Taxation and Understanding the Federal 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 Nontaxable Exchanges

Property Transactions, capital Gains and Losses, sec1231, 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 Reorganization

Partnerships

S Corporations

Exempt Entities

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Income Taxation of Trusts and Estates

Filters

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