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

A taxpayer's tentative minimum tax exceeds his net income tax so he will be paying the alternative minimum tax this year.The taxpayer has a sole proprietorship through which he has earned general business credits.The taxpayer can reduce his AMT to the extent of his general business credits.

To claim the Lifetime Learning Credit,a student must take at least one-half of a full-time course load during the year.

The earned income credit is refundable only if a tax has been withheld.

Jeffery and Cassie,who are married with modified AGI of $90,000,are sending their son to his first year of college.Their total tuition and related payments during 2015 amounted to $5,500.They have not taken advantage of any other type of tax benefit related to educational expenses.Their American Opportunity Tax Credit for 2015 is

Nonrefundable personal tax credits are allowed against the taxpayer's tax liability before other credits are claimed.

All of the following statements are true regarding the Lifetime Learning Credit except which one?

One-half of the self-employment tax imposed is allowed as a for AGI deduction.

Jake and Christina are married and file a joint return for 2015 with taxable income of $100,000 and tax preferences and adjustments of $20,000 for AMT purposes.Their regular tax liability is $16,713.What is the amount of their total tax liability?

Carlotta,Inc.has $50,000 foreign-source income and $150,000 worldwide income.Its U.S.tax on its worldwide income is $42,000 and it paid foreign taxes of $12,000.What is the corporation's foreign tax credit?

Which of the following is not a qualifying property for the residential energy efficient property (REEP)credit?

In computing AMTI,tax preference items are

George and Meredith who are married,have a regular tax liability of $22,838 based on regular taxable income of $125,000.This year they generated tax preferences of $25,000,and positive adjustments attributable to limitations on itemized deductions of $18,700.In determining regular taxable income,they had claimed $12,000 of personal and dependency exemptions for themselves and their 20-year old dependent daughter.What is George and Meredith's alternative minimum tax for 2015?

Reva and Josh Lewis had alternative minimum taxable income of $350,000 in 2015 and file a joint return.For purposes of computing the alternative minimum tax,their exemption is

All of the following statements regarding self-employment income/tax are true except:

Lara started a self-employed consulting business in the last part of the year and earned $60,000 of self- employment income.She had been employed as manager in a consulting firm prior to starting her own business and had earned $175,000. (a)What is Lara's Additional Medicare Tax for 2015,if any? (b)What is Lara's deduction for AGI for the Additional Medicare Tax?

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

Discuss tax-planning options available for expenses incurred for child and dependent care.

Marguerite and Josephus have two children,ages 13 and 10.Their modified AGI is $120,500.What is their child tax credit?

The health insurance premium assistance credit is designed to help lower and middle income taxpayers who purchase their own health insurance insurance directly from an insurance company or through a state or federal exchange.

Discuss actions a taxpayer can take if it is anticipated that his income taxes will be substantially underpaid in order to minimize penalties.