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

For purposes of the limitation on qualifying expenses for the child and dependent care credit,a spouse who is either a full-time student or is incapacitated is deemed to have earned income of $250 per month,or $500 per month if there are two or more qualifying individuals in the household.

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

Dwayne has general business credits totaling $30,000 before limitation.His regular tax liability is $83,000 and his tentative minimum tax is $79,000.What amount of general business credit can Dwayne take this year?

Nonrefundable credits may offset tax liability but may not result in additional payments to the taxpayer.

The alternative minimum tax applies to individuals only if it exceeds the taxpayer's regular income tax liability.

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

A corporation has $100,000 of U.S.source taxable income and $300,000 of foreign source taxable income from countries X and Y for a total worldwide taxable income of $400,000.Countries X and Y levy a total of $60,000 in foreign taxes upon the foreign source taxable income.U.S.taxes before credits are $140,000.The foreign tax credit limitation is

Discuss when Form 6251,Alternative Minimum Tax,must be filed.

In computing the alternative minimum taxable income,no deduction is allowed for

Nick and Nicole are both 68 years old and file a joint return.They have AGI of $15,000 and receive nontaxable Social Security payments of $4,200 during the current year.What is the amount of the tax credit for the elderly?

Individuals who do not have minimum essential health insurance coverage will pay an excise tax.

Bob's income can vary widely from year-to-year because much of his compensation comes from sales commissions and bonuses.It generally is in the $200,000 to $300,000 range.To minimize the risk of underpayment penalties for estimated tax he should pay in,through payroll withholding and estimated tax payments,100% of the prior year tax liability.

A credit for rehabilitation expenditures is available to a business for the purchase price of a building originally placed in service before 1936.

If a taxpayer's AGI is greater than $150,000,no penalty will be imposed if the taxpayer pays estimated tax payments in 2014 equal to what percentage of 2013's income tax liability?

Drake and Davina are married and file a joint return for 2015 with taxable income of $100,000 and tax preferences and adjustments of $51,000 for AMT purposes.Their regular tax liability is $16,713.What is the amount of their total tax liability?

Evan and Barbara incurred qualified adoption expenses in 2014 of $6,000,and then incurred $9,000 more in 2015 when the adoption of their child became final.Their 2014 AGI was $110,000 and their 2015 AGI was $100,000.The allowable adoption credit is

Joe,who is single with modified AGI of $84,000,is sending his son to his first year of college.The total tuition and related payments during the year amounted to $18,000.Joe has not taken advantage of any other type of tax benefit related to educational expenses.His American Opportunity Tax Credit is

If an individual is liable for self-employment tax,a portion of the self-employment tax is

All of the following are allowable deductions under the alternative minimum tax except

If an individual is an employee and also has self-employment income,the maximum tax base for computing self-employment tax is reduced by the wages that are subject to the FICA tax.