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

Runway Corporation has $2 million of gross receipts in the preceding year.For purposes of the disabled access credit,what is the maximum number of full-time employees the corporation can have in the preceding year?

Casualty and theft losses in excess of 10% of AGI are deductible for AMT purposes.

Sam and Megan are married with two dependent children.Both Sam and Megan work,earning $50,000 and $55,000,respectively.Their AGI totals $110,000.They incur $6,500 of qualifying child care expenses of which $2,500 is reimbursed by Megan's dependent care program at work. What is the amount of their child and dependent care credit?

Lee and Whitney incurred qualified adoption expenses in 2014 of $2,000,and then incurred $7,000 more in 2015 when the adoption of their child became final.Their 2014 AGI was $120,000 and their 2015 AGI was $140,000.The allowable adoption credit is

Tanya has earnings from self-employment of $240,000,resulting in self-employment tax of $21,122 and Additional MedicareTax of $360.Due to these taxes,Tanya will be allowed a deduction for AGI of

Annie has taxable income of $100,000,a regular tax liability of $21,071,a positive AMT adjustment due to limitations on itemized deductions of $20,000,and tax preferences of $25,000 in 2015.Annie is single and takes a $4,000 personal exemption for herself only.What is Annie's AMT for 2015?

Beth and Jay project the following taxes for the current year: How much in estimated tax payments (including withholding from wages and quarterly estimated payments)should the taxpayers pay this year in order to avoid underpayment penalties under the following assumptions regarding the preceding tax year? a.Preceding tax year-AGI of $140,000 and total taxes of $36,000. b.Preceding tax year-AGI of $155,000 and total taxes of $50,000.

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.

Refundable tax credits

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

In computing AMTI,adjustments are

Tyler and Molly,who are married filing jointly with $210,000 of AGI in 2015,incurred the following expenses in their efforts to adopt a child: The adoption was finalized in 2015.What is the amount of the allowable adoption credit in 2015?

Describe the differences between the American Opportunity Tax credit and the Lifetime Learning credit.

If estimated tax payments equal or exceed 100% of the actual tax liability for the prior year,there is generally (assuming AGI less than or equal to $150,000)no penalty for underpayment of estimated taxes.

In 2015 Rita is divorced with one child.She has AGI of $19,500 resulting in a federal income tax liability of $225 and an earned income credit of $3,137.She has had $550 of federal income taxes withheld from her pay.Rita will receive a federal income refund of

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 $125,000. (a)What is Sonya's self employment tax for 2015? (b)What is Sonya's deduction for AGI for the SE tax?

Medical expenses in excess of 10% of AGI are deductible when computing AMT.

All tax-exempt bond interest income is classified as an AMT preference.

Bonjour Corp.is a U.S.-based corporation with operations in France.The operations in France generated $200,000 of taxable income whereas worldwide operations generated total taxable income of $2,000,000.Its U.S.tax liability before credits is $680,000.Determine the allowable foreign tax credit assuming taxes paid to France as follows: a.$40,000. b.$80,000.

Margo and Jonah have two children,ages 13 and 17.Their modified AGI is $120,500.What is their child tax credit?