Question 1

Which of the following is true of the alternative minimum tax?

Accepted Answer

A) The alternative minimum tax is designed to ensure that high income taxpayers do not pay excessive amounts of income tax. 
B) For 2014, the alternative minimum tax rates are 20 percent and 30 percent, depending on the taxpayer's income. 
C) The amount of a taxpayer's state income tax may not be deducted for the purpose of computing the alternative minimum tax. 
D) All tax-exempt interest is a tax preference item for the alternative minimum tax. 
E) None of the above are true. 
A) The alternative minimum tax is designed to ensure that high income taxpayers do not pay excessive amounts of income tax. 
B) For 2014, the alternative minimum tax rates are 20 percent and 30 percent, depending on the taxpayer's income. 
C) The amount of a taxpayer's state income tax may not be deducted for the purpose of computing the alternative minimum tax. 
D) All tax-exempt interest is a tax preference item for the alternative minimum tax. 
E) None of the above are true.

Question 2

Fletch and Cammie Gates are married with three dependent children and household income of $55,140 in 2014. The Gates purchased health care insurance on their state's exchange for total premiums of $6,000. A designated silver plan for their family in their state costs $9,700. Calculate the Gates' premium tax credit.​

Accepted Answer

$6,000. $55,140/$27,570 = 200% os the fe

Question 3

Which of the common deductions below are allowed for both regular tax purposes and for AMT purposes?

Accepted Answer

A) The standard deduction 
B) Personal and dependency exemptions 
C) State income taxes, property taxes, and all other taxes deducted on Schedule A 
D) Mortgage interest from the acquisition of a residence costing less than $1 million 
E) Miscellaneous itemized deductions taken on Schedule A 
A) The standard deduction 
B) Personal and dependency exemptions 
C) State income taxes, property taxes, and all other taxes deducted on Schedule A 
D) Mortgage interest from the acquisition of a residence costing less than $1 million 
E) Miscellaneous itemized deductions taken on Schedule A

Question 4

Dan and Maureen file a joint income tax return for 2014. They have two dependent children, ages 7 and 9. Together they earn wages of $152,000. They also receive taxable interest income of $8,000 and interest on City of Los Angeles bonds of $12,000. During 2014, they received a state income tax refund of $3,000 relating to their 2013 state income tax return on which they itemized deductions. Their expenses for the year consist of the following:
Calculate Dan and Maureen's tentative minimum tax liability assuming an exemption amount of $82,100, before any phase-outs. Show your calculations.

Accepted Answer

The answer of Dan and Maureen file a joint income...

Question 5

Keith has a 2014 tax liability of $2,250 before taking into account his American Opportunity 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 credit was not subject to phase out. What is the amount of his American Opportunity 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 6

​Caprice is a single 42-year-old with income of $12,000 in 2014. She lacked minimum essential coverage for 7 months in 2014. What is her individual shared responsibility?

Accepted Answer

A) ​$0 
B) ​$18.50 
C) ​$55.44 
D) ​$95 
E) ​None of the above 
A) ​$0 
B) ​$18.50 
C) ​$55.44 
D) ​$95 
E) ​None of the above

Question 7

For 2014, Beatrice qualifies for the earned income credit. She has one daughter who is 7 years old. Her earned income and adjusted gross income for 2014 are $6,100.
a.Using the EIC tables, calculate the amount of her 2014 earned income credit.
b.​Calculate the amount of Beatrice's 2013 earned income credit assuming her earned income for 2014 is $8,400 and her adjusted gross income is $10,000.

Accepted Answer

The answer of For 2014, Beatrice qualifies for the earned...

Question 8

William and Irma have two children, Tom, age 13, and Sara, age 8. For 2014, Tom and Sara have a total parental tax of $5,600. Tom's net unearned income is $5,000, while Sara's net unearned income is $15,000. How much of the parental tax would be allocated to Sara on her 2014 tax return?

Accepted Answer

A) $0 
B) $4,200 
C) $2,800 
D) $5,600 
E) None of the above 
A) $0 
B) $4,200 
C) $2,800 
D) $5,600 
E) None of the above

Question 9

Hal is enrolled for one class at a local community college; tuition cost him $190. Hal's AGI is $20,000. Hal can take a lifetime learning credit of:

Accepted Answer

A) $0 
B) $38 
C) $100 
D) $190 
E) $250 
A) $0 
B) $38 
C) $100 
D) $190 
E) $250

Question 10

Taxpayers are allowed two tax breaks for adoption expenses. They are allowed:

Accepted Answer

A) ​​   ​ 
B) ​​   ​ 
C) ​​   ​ 
D) ​​   ​ 
A) ​​   ​ 
B) ​​   ​ 
C) ​​   ​ 
D) ​​   ​

Question 11

The American Opportunity credit

Accepted Answer

A) Is 50 percent of the first $1,200 of tuition and fees paid and 100 percent of the next $1,200. 
B) Is available for 2 years of post-secondary education. 
C) Is fully refundable even if the credit exceeds the tax liability. 
D) Is available for qualifying expenses paid on behalf of the taxpayer and his or her spouse, in addition to those paid for dependents. 
A) Is 50 percent of the first $1,200 of tuition and fees paid and 100 percent of the next $1,200. 
B) Is available for 2 years of post-secondary education. 
C) Is fully refundable even if the credit exceeds the tax liability. 
D) Is available for qualifying expenses paid on behalf of the taxpayer and his or her spouse, in addition to those paid for dependents.

Question 12

Jim has foreign income. He earns $26,000 from Country A which taxes the income at a 20 percent rate. He also has income from Country B of $18,000. Country B taxes the $18,000 at a 10 percent rate. His U.S. taxable income is $90,000, which includes the foreign income. His U.S. income tax on all sources of income before credits is $19,000. What is his foreign tax credit?

Accepted Answer

A) $6,500 
B) $7,000 
C) $9,289 
D) $19,000 
E) Jim does not qualify for a foreign tax credit. 
A) $6,500 
B) $7,000 
C) $9,289 
D) $19,000 
E) Jim does not qualify for a foreign tax credit.

Question 13

If the net unearned income of a minor child is to be taxed at the parents' tax rate, the parents may elect, under certain conditions, to include the child's gross income on their tax return.

Accepted Answer

A) True 
 B)False

Question 14

Arthur is divorced with two dependent children, ages 8 and 13. His adjusted gross income for 2014 is $28,000, and he incurs qualified child care expenses of $6,000, $3,000 for each child.
a.What is the amount of Arthur's qualified child care expenses after any limitation?
b.Calculate the amount of Arthur's child care credit for 2014.

Accepted Answer

The answer of Arthur is divorced with two dependent children,...

Question 15

Which one of the following taxpayers qualify for the earned income credit?

Accepted Answer

A) A 70-year-old doctor whose practice had a net loss and who has an AGI of $5,000 in 2014. 
B) An 18-year-old college student who earns $8,000 at a part-time job. 
C) A couple who have a combined AGI of $17,000 and three children but file separately. 
D) A 31-year-old construction worker with $22,000 of AGI and two children. 
E) None of the above qualifies for the earned income credit. 
A) A 70-year-old doctor whose practice had a net loss and who has an AGI of $5,000 in 2014. 
B) An 18-year-old college student who earns $8,000 at a part-time job. 
C) A couple who have a combined AGI of $17,000 and three children but file separately. 
D) A 31-year-old construction worker with $22,000 of AGI and two children. 
E) None of the above qualifies for the earned income credit.

Question 16

In 2014, Erin purchased a solar system to generate electricity for her home, at a cost of $5,000.
a. How much is her tax credit in 2014?
b. If she had purchased a solar heating system for her swimming pool at a cost of $3,500, how much could she claim as a tax credit?
c. If she had purchased a $5,000 solar electric system and a $4,500 solar heating system for her principal home (not for the swimming pool), how much could she claim as a tax credit?
d. If she had purchased the electric system for her principal residence and the solar heating system for a second residence, how much could she claim as a tax credit?

Accepted Answer

a. 30% of the cost of the improvement, o

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Clark, a widower, maintains a household for himself and his two dependent preschool children. For the year ended December 31, 2014, Clark earned a salary of $32,000. He paid $3,500 to a housekeeper to care for his children in his home, and also paid $1,500 to a kiddie play camp for child care. He had no other income or expenses during 2014. How much can Clark claim as a child care credit in 2014?

Accepted Answer

A) $910 
B) $1,300 
C) $2,000 
D) $5,000 
E) None of the above 
A) $910 
B) $1,300 
C) $2,000 
D) $5,000 
E) None of the above

Question 19

Calculate the child credits for the following taxpayers. Please show your work.
a. Ninfa is a single mother with 8-year-old and 9-year-old dependent sons and has $50,000 of AGI.
b. Sharon and Mark have one dependent 2-year-old child and $126,300 of AGI.
c. Carol is single and has one dependent 18-year-old son.

Accepted Answer

a. $2,000. Ninfa's income is less than t

Question 20

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.

Which of the following is true of the alternative minimum tax?

Which of the common deductions below are allowed for both regular tax purposes and for AMT purposes?

Caprice is a single 42-year-old with income of $12,000 in 2014. She lacked minimum essential coverage for 7 months in 2014. What is her individual shared responsibility?

William and Irma have two children, Tom, age 13, and Sara, age 8. For 2014, Tom and Sara have a total parental tax of $5,600. Tom's net unearned income is $5,000, while Sara's net unearned income is $15,000. How much of the parental tax would be allocated to Sara on her 2014 tax return?

Hal is enrolled for one class at a local community college; tuition cost him $190. Hal's AGI is $20,000. Hal can take a lifetime learning credit of:

Taxpayers are allowed two tax breaks for adoption expenses. They are allowed:

The American Opportunity credit

If the net unearned income of a minor child is to be taxed at the parents' tax rate, the parents may elect, under certain conditions, to include the child's gross income on their tax return.

Which one of the following taxpayers qualify for the earned income credit?

All taxpayers are required to have minimum essential health coverage.

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:

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

Which of the following is true of the alternative minimum tax?

Which of the common deductions below are allowed for both regular tax purposes and for AMT purposes?

​Caprice is a single 42-year-old with income of $12,000 in 2014. She lacked minimum essential coverage for 7 months in 2014. What is her individual shared responsibility?

William and Irma have two children, Tom, age 13, and Sara, age 8. For 2014, Tom and Sara have a total parental tax of $5,600. Tom's net unearned income is $5,000, while Sara's net unearned income is $15,000. How much of the parental tax would be allocated to Sara on her 2014 tax return?

Hal is enrolled for one class at a local community college; tuition cost him $190. Hal's AGI is $20,000. Hal can take a lifetime learning credit of:

Taxpayers are allowed two tax breaks for adoption expenses. They are allowed:

The American Opportunity credit

If the net unearned income of a minor child is to be taxed at the parents' tax rate, the parents may elect, under certain conditions, to include the child's gross income on their tax return.

Which one of the following taxpayers qualify for the earned income credit?

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

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:

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

Caprice is a single 42-year-old with income of $12,000 in 2014. She lacked minimum essential coverage for 7 months in 2014. What is her individual shared responsibility?

All taxpayers are required to have minimum essential health coverage.