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

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

Which statement is correct?

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

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

Assume a taxpayer projects that his total income tax for the year will $25,000.A taxpayer with savings should prefer to structure his tax prepayments so that he will receive a tax refund of $2,500 rather than a tax due of $2,500.

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.