Exam 28: Special Tax Computation Methods,tax Credits,and Payment of Tax

Kors Corporation has 30 employees and $5 million of gross receipts.Kors spends $15,000 for qualified structural improvements for access for the disabled.The disabled access credit is

Which statement is correct?

Nonrefundable personal credits cannot offset AMT.

All of the following are self-employment income except

The earned income credit is available only to taxpayers with qualifying children.

Qualified tuition and related expenses eligible for the American Opportunity Tax Credit are limited to those incurred the first two years of postsecondary education.

In the fall of 2015,James went back to school to earn a master of accountancy degree.He incurred $7,000 of qualified educational expenses and his modified AGI for the year was $40,000.His Lifetime Learning Credit is

For purposes of the AMT,only the foreign tax credit and refundable personal credits are allowed to reduce the tentative minimum tax.

The general business credit may not exceed the net income tax minus the greater of the tentative minimum tax or

Which of the following expenditures will qualify as a research expenditure for purposes of the research credit?

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

Tom and Anita are married,file a joint return with an AGI of $165,000,and have one dependent child,Tim,who is a first-time freshman in college.The following expenses are incurred and paid in 2015: What is the maximum education credit allowed to Tom and Anita?

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

ChocoHealth Inc.is developing new chocolate products providing abundant health benefits at low calorie counts.For the past three years,it spent an average of $500,000 per year on research.ChocoHealth has spent $900,000 on research.The company has elected the simplified credit.For the current year,it will earn a research credit of

Octo Corp.purchases a building for use in its business at a cost of $100,000.The building was built in 1930 and needs substantial work so it can be used.Octo spends $150,000 on qualifying renovations.Octo will earn a rehabilitation credit of

A self-employed individual has earnings from his business of $300,000.For the earnings in excess of the $118,500,he will only have to pay the 2.9% Medicare tax.

Mark and Stacy are married,file a joint return,and have one child,age 3.Their combined AGI is $55,000.Mark and Stacy incur $3,500 of child-care expenses during the current year.Mark's employer reimburses him $1,500 under a qualified dependent care assistance plan.The child and dependent care credit is

The alternative minimum tax applies to individuals,corporations,estates,and trusts.

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

A taxpayer will be ineligible for the earned income credit if he or she has disqualified investment income of more than $3,400 in 2015.Disqualified income includes all the following except