Question 1

With respect to estimated tax payments for a taxpayer with AGI of $150,000 or lower in the prior year,all of the following are generally true with the exception of

Accepted Answer

A) no penalty is imposed if the estimated tax is less than $1,000. 
B) no penalty is imposed if the individual has no tax liability for the prior year. 
C) no underpayment penalty is imposed if the estimated payments total at least 90% of the tax due for the current year. 
D) no underpayment penalty is imposed if the estimated payments total at least 90% of the actual tax liability for the prior year.

Question 2

The nonrefundable disabled access credit is available to eligible small businesses for expenditures incurred to make existing business facilities accessible to disabled individuals.

Accepted Answer

A) True 
 B)False

Question 3

Rex has the following AMT adjustment factors: -Depreciation of real property acquired in 1996 using MACRS is $22,000 while depreciation for AMT purposes is $15,000.
-R&E expenditures amounting to $60,000 are expensed.
The net adjustment is

Accepted Answer

A) $7,000. 
B) $54,000. 
C) $61,000. 
D) $67,000.

Question 4

Suzanne,a single taxpayer,has the following tax information for the current year. • Charitable contribution of real property with a FMV of $25,000 (adjusted basis $20,000)for which a $25,000 deduction was taken for regular tax.
• Research and experimental expenses of $40,000 deducted in full for regular tax.
Suzanne's total tax preferences and adjustments equals

Accepted Answer

A) $5,000. 
B) $36,000. 
C) $41,000. 
D) $45,000.

Question 5

Yulia has some funds that she wishes to invest,but is concerned that she is at risk for AMT.Yulia should avoid investing in all municipal bonds.

Accepted Answer

A) True 
 B)False

Question 6

Margo and Jonah have two children,ages 13 and 17.Their modified AGI is $410,500.What is their child tax credit?

Accepted Answer

A) $1,450 
B) $2,900 
C) $4,000 
D) $2,000

Question 7

Self-employment taxes include components for

Accepted Answer

A) Medicare hospital insurance and SUTA. 
B) Social Security and FUTA. 
C) FICA and FUTA. 
D) Social Security and Medicare hospital insurance.

Question 8

Claire accepts a new job.She will have access to health insurance coverage through her employer.The employer's policy meets the criteria for affordable minimum essential coverage.Claire prefers to purchase her own insurance policy through the state or federal exchange so she can retain access to her doctor.Assuming Claire's income is within the parameters specified,she will be eligible for the health insurance premium assistance credit.

Accepted Answer

A) True 
 B)False

Question 9

Timothy and Alice,who are married with modified AGI of $90,000,are sending their daughter to her first year of college.Their total tuition and related payments during the year amounted to $13,000.In addition,their daughter received a $10,000 scholarship to cover tuition.They have not taken advantage of any other type of tax benefit related to educational expenses.Their American Opportunity Tax Credit is

Accepted Answer

A) $2,000. 
B) $2,250. 
C) $2,500. 
D) $3,000.

Question 10

An individual with AGI equal to or less than $150,000 in the prior year may generally avoid penalties for underpayment of estimated tax in each of the following cases with the exception of

Accepted Answer

A) estimated tax is less than $1,500. 
B) 90% of the tax due for the current year is paid. 
C) 90% of the tax due for the current year is paid when computed on an annualized basis. 
D) 100% of the actual tax liability for the prior year is paid.

Question 11

Harley's tentative minimum tax is computed by multiplying the AMT tax rates by her

Accepted Answer

A) taxable income. 
B) alternative minimum tax base. 
C) alternative minimum taxable income. 
D) tentative alternative taxable income.

Question 12

A taxpayer who paid AMT in prior years,but is not subject to the AMT in the current year,may be entitled to an AMT credit against his regular tax liability in the current year.

Accepted Answer

A) True 
 B)False

Question 13

Sonya started a self-employed consulting business in the last part of the year and earned $40,000.She had been employed as manager in a consulting firm prior to starting her own business and had earned $135,000.
a.What is Sonya's self employment tax for 2019?
b.What is Sonya's deduction for AGI for the SE tax?

Accepted Answer

The answer of Sonya started a self-employed consulting business in...

Question 14

An example of an AMT tax preference item is the excess of MACRS depreciation on equipment over depreciation computed by using the 150% declining balance method.

Accepted Answer

A) True 
 B)False

Question 15

In computing AMTI,tax preference items are

Accepted Answer

A) excluded. 
B) added only. 
C) subtracted only. 
D) either added or subtracted.

Question 16

Ivan has generated the following taxes and credits this year:
Regular tax $38,000
Tentative minimum tax 28,000
Dependent care credit 1,200
Lifetime Learning credit 800
General business credits 35,000
How much general business credit will he apply to the current year tax liability?

Accepted Answer

The answer of Ivan has generated the following taxes and...

Question 17

The foreign tax credit is equal to the smaller of foreign taxes paid or accrued in the tax year or the portion of the U.S.income tax liability attributable to the income earned in all foreign countries.

Accepted Answer

A) True 
 B)False

Question 18

In lieu of a foreign tax credit,a taxpayer may elect to take a deduction for foreign taxes paid or accrued.

Accepted Answer

A) True 
 B)False

Question 19

A taxpayer at risk for AMT should consider which of the following decisions?

Accepted Answer

A) investing in corporate bonds 
B) timing of state income tax estimated payments 
C) choosing a depreciation method for a new business building 
D) all of the above

Question 20

Bud and Stella are married,file a joint return,and have one child,age 3.Their combined AGI is $35,000.Bud and Stella incur $3,500 of child care expenses during the current year.The child and dependent care credit is

Accepted Answer

A) $600. 
B) $700. 
C) $750. 
D) $875.

Exam 30: Special Tax Computation Methods,tax Credits,and Payment of Tax

With respect to estimated tax payments for a taxpayer with AGI of $150,000 or lower in the prior year,all of the following are generally true with the exception of

The nonrefundable disabled access credit is available to eligible small businesses for expenditures incurred to make existing business facilities accessible to disabled individuals.

Rex has the following AMT adjustment factors: -Depreciation of real property acquired in 1996 using MACRS is $22,000 while depreciation for AMT purposes is $15,000. -R&E expenditures amounting to $60,000 are expensed. The net adjustment is

Yulia has some funds that she wishes to invest,but is concerned that she is at risk for AMT.Yulia should avoid investing in all municipal bonds.

Margo and Jonah have two children,ages 13 and 17.Their modified AGI is $410,500.What is their child tax credit?

Self-employment taxes include components for

An individual with AGI equal to or less than $150,000 in the prior year may generally avoid penalties for underpayment of estimated tax in each of the following cases with the exception of

Harley's tentative minimum tax is computed by multiplying the AMT tax rates by her

A taxpayer who paid AMT in prior years,but is not subject to the AMT in the current year,may be entitled to an AMT credit against his regular tax liability in the current year.

An example of an AMT tax preference item is the excess of MACRS depreciation on equipment over depreciation computed by using the 150% declining balance method.

In computing AMTI,tax preference items are

Ivan has generated the following taxes and credits this year: Regular tax $38,000 Tentative minimum tax 28,000 Dependent care credit 1,200 Lifetime Learning credit 800 General business credits 35,000 How much general business credit will he apply to the current year tax liability?

The foreign tax credit is equal to the smaller of foreign taxes paid or accrued in the tax year or the portion of the U.S.income tax liability attributable to the income earned in all foreign countries.

In lieu of a foreign tax credit,a taxpayer may elect to take a deduction for foreign taxes paid or accrued.

A taxpayer at risk for AMT should consider which of the following decisions?

Bud and Stella are married,file a joint return,and have one child,age 3.Their combined AGI is $35,000.Bud and Stella incur $3,500 of child care expenses during the current year.The child and dependent care credit is