Question 1

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 2

The tax credit for rehabilitation expenditures for certified historic structures differs from that for qualifying structures that are not certified historic structures.

Accepted Answer

A) True 
 B)False

Question 3

Identify the statement below that is false.

Accepted Answer

A) If an employer is not required to withhold income taxes from an employee's wages, the wages are not taxable to the employee. 
B) In certain situations, income tax withholding by an employer is voluntary. 
C) An employer must deposit with the government an amount of FICA tax that is twice the amount withheld from the employee's salary (i.e., the employee's and employer's shares). 
D) If an excess amount of FICA has been withheld for an employee because the employee has multiple jobs, the employee may claim a credit for the excess amount withheld on his or her income tax return. 
E) None of the above statements are false. 
A) If an employer is not required to withhold income taxes from an employee's wages, the wages are not taxable to the employee. 
B) In certain situations, income tax withholding by an employer is voluntary. 
C) An employer must deposit with the government an amount of FICA tax that is twice the amount withheld from the employee's salary (i.e., the employee's and employer's shares). 
D) If an excess amount of FICA has been withheld for an employee because the employee has multiple jobs, the employee may claim a credit for the excess amount withheld on his or her income tax return. 
E) None of the above statements are false.

Question 4

Both education tax credits are available for qualified tuition expenses,and in certain instances,also may be available for room and board.

Accepted Answer

A) True 
 B)False

Question 5

Bradley has two college-age children,Clint,a freshman at State University,and Abigail,a junior at Northwest University.Both Clint and Abigail are full-time students.Clint's expenses during the 2017 fall semester are as follows: $2,400 tuition,$250 books and course materials,and $1,600 room and board.Abigail's expenses for the 2017 calendar year are as follows: $10,200 tuition,$1,200 books and course materials,and $3,600 room and board.Tuition and the applicable room and board costs are paid at the beginning of each semester.
​
Bradley is married,files a joint tax return,claims both children as dependents,and reports a combined AGI with his wife Allie of $114,000 for 2017.Determine Bradley's available education tax credit for 2017.

Accepted Answer

In 2017,both Clint and Abigail qualify f

Question 6

Which of the following issues does not need resolution in an employer's effort to comply with employment tax payment requirements?

Accepted Answer

A) Ascertaining which employees and wages are covered by employment taxes and are subject to withholding for income taxes. 
B) Arriving at the amount to be paid and/or withheld. 
C) Reporting and paying employment taxes and income taxes withheld to the IRS on a timely basis through the use of proper forms. 
D) Each of the above issues needs to be resolved. 
E) None of the above is relevant to the employer. 
A) Ascertaining which employees and wages are covered by employment taxes and are subject to withholding for income taxes. 
B) Arriving at the amount to be paid and/or withheld. 
C) Reporting and paying employment taxes and income taxes withheld to the IRS on a timely basis through the use of proper forms. 
D) Each of the above issues needs to be resolved. 
E) None of the above is relevant to the employer.

Question 7

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 8

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 9

Expenses that are reimbursed by a taxpayer's employer under a dependent care assistance program can also qualify for the credit for child and dependent care expenses.

Accepted Answer

A) True 
 B)False

Question 10

Pat generated self-employment income in 2017 of $76,000.The self-employment tax is:

Accepted Answer

A) $0. 
B) $5,369.23. 
C) $10,738.46. 
D) $11,628.00. 
A) $0. 
B) $5,369.23. 
C) $10,738.46. 
D) $11,628.00.

Question 11

Several years ago,Sarah purchased a structure for $150,000 that was placed in service in 1929.In the current year,she incurred qualifying rehabilitation expenditures of $200,000.The amount of the tax credit for rehabilitation expenditures,and the amount by which the building's basis for cost recovery would increase as a result of the rehabilitation expenditures are the following amounts.

Accepted Answer

A) $20,000 credit, $180,000 basis. 
B) $20,000 credit, $200,000 basis. 
C) $20,000 credit, $350,000 basis. 
D) $40,000 credit, $160,000 basis. 
A) $20,000 credit, $180,000 basis. 
B) $20,000 credit, $200,000 basis. 
C) $20,000 credit, $350,000 basis. 
D) $40,000 credit, $160,000 basis.

Question 12

During 2017,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) $154. 
C) $359. 
D) $510. 
A) $0. 
B) $154. 
C) $359. 
D) $510.

Question 13

Bob and Sally are married,file a joint tax return,report AGI of $116,000,and have two children.Del is beginning her freshman year at State College during Fall 2017,and Owen is beginning his senior year at Southwest University during Fall 2017.Owen completed his junior year during the Spring semester of 2016 (i.e.,he took a "leave of absence" during the 2016-2017 school year).Both Del and Owen are claimed as dependents on their parents' tax return. Del's qualifying tuition expenses and fees total $5,000 for the Fall semester,while Owen's qualifying tuition expenses were $6,100 for the Fall 2017 semester.Del's room and board costs were $3,200 for the Fall semester.Owen did not incur room and board costs,as he lived with his aunt and uncle during the year.
Full payment is made for the tuition and related expenses for both children at the beginning of each semester.In addition to the children's college expenses,Bob also spent $3,000 on professional education seminars during the year in order to maintain his license as a practicing dentist.Bob attended the seminars during July and August 2017.Compute the available education tax credits for Bob and Sally for 2017.

Accepted Answer

A) $3,100 
B) $5,000 
C) $5,480 
D) $5,600 
A) $3,100 
B) $5,000 
C) $5,480 
D) $5,600

Question 14

The base amount for the Social Security portion (old age,survivors,and disability insurance) is different from that for the Medicare portion of FICA.

Accepted Answer

A) True 
 B)False

Question 15

Some (or all) of the tax credit for rehabilitation expenditures will have to be recaptured if the rehabilitated property is disposed of prematurely or if it ceases to be qualifying property.

Accepted Answer

A) True 
 B)False

Question 16

Explain the purpose of the tax credit for rehabilitation expenditures and describe the general characteristics of its computation.

Accepted Answer

The rehabilitation expenditures credit i

Question 17

An employer calculates the amount of income tax withheld from salary or wages based on the information an employee provides on the following form:

Accepted Answer

A) Form W-2. 
B) Form W-3. 
C) Form W-4. 
D) Form 941. 
A) Form W-2. 
B) Form W-3. 
C) Form W-4. 
D) Form 941.

Question 18

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 19

Which of the following statements concerning the credit for child and dependent care expenses is not correct?

Accepted Answer

A) A taxpayer is not allowed both an exclusion from income and the credit for child and dependent care expenses on the same amount. 
B) A taxpayer is not allowed both a deduction as a medical expense and the credit for child and dependent care expenses on the same amount. 
C) If a taxpayer's adjusted gross income exceeds $43,000, the rate for the credit for child and dependent care expenses is 20%. 
D) If a taxpayer's adjusted gross income exceeds $15,000 but is not over $17,000, the rate for the credit for child and dependent care expenses is 35%. 
E) All of the above statements are correct. 
A) A taxpayer is not allowed both an exclusion from income and the credit for child and dependent care expenses on the same amount. 
B) A taxpayer is not allowed both a deduction as a medical expense and the credit for child and dependent care expenses on the same amount. 
C) If a taxpayer's adjusted gross income exceeds $43,000, the rate for the credit for child and dependent care expenses is 20%. 
D) If a taxpayer's adjusted gross income exceeds $15,000 but is not over $17,000, the rate for the credit for child and dependent care expenses is 35%. 
E) All of the above statements are correct.

Question 20

During the year,Purple Corporation (a U.S.Corporation) has U.S.-source income of $1,800,000 and foreign income of $600,000.The foreign-source income generates foreign income taxes of $150,000.The U.S.income tax before the foreign tax credit is $816,000.Purple Corporation's foreign tax credit is:

Accepted Answer

A) $112,500. 
B) $150,000. 
C) $204,000. 
D) $816,000. 
A) $112,500. 
B) $150,000. 
C) $204,000. 
D) $816,000.

Exam 12: Tax Credits and Payments

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

The tax credit for rehabilitation expenditures for certified historic structures differs from that for qualifying structures that are not certified historic structures.

Identify the statement below that is false.

Both education tax credits are available for qualified tuition expenses,and in certain instances,also may be available for room and board.

Which of the following issues does not need resolution in an employer's effort to comply with employment tax payment requirements?

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

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.

Expenses that are reimbursed by a taxpayer's employer under a dependent care assistance program can also qualify for the credit for child and dependent care expenses.

Pat generated self-employment income in 2017 of $76,000.The self-employment tax is:

During 2017,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:

The base amount for the Social Security portion (old age,survivors,and disability insurance) is different from that for the Medicare portion of FICA.

Some (or all) of the tax credit for rehabilitation expenditures will have to be recaptured if the rehabilitated property is disposed of prematurely or if it ceases to be qualifying property.

Explain the purpose of the tax credit for rehabilitation expenditures and describe the general characteristics of its computation.

An employer calculates the amount of income tax withheld from salary or wages based on the information an employee provides on the following form:

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

Which of the following statements concerning the credit for child and dependent care expenses is not correct?

During the year,Purple Corporation (a U.S.Corporation) has U.S.-source income of $1,800,000 and foreign income of $600,000.The foreign-source income generates foreign income taxes of $150,000.The U.S.income tax before the foreign tax credit is $816,000.Purple Corporation's foreign tax credit is:

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

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