Question 1

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

Accepted Answer

A) True 
 B)False  False

Question 2

A self-employed individual has earnings from his business of $300,000. For the earnings in excess of the $117,000,he will only have to pay the 2.9% Medicare tax.

Accepted Answer

A) True 
 B)False  False

Question 3

Individuals without children are eligible for the earned income credit if they meet all the following conditions except

Accepted Answer

A) file married filing separately. 
B) at tax year end are at least age 25 but not more than age 64. 
C) for the tax year are not a dependent of another taxpayer. 
D) the United States is their principal place of residence for more than one-half of the tax year. 
A) file married filing separately. 
B) at tax year end are at least age 25 but not more than age 64. 
C) for the tax year are not a dependent of another taxpayer. 
D) the United States is their principal place of residence for more than one-half of the tax year. A

Question 4

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

Accepted Answer

A) estimated tax is less than $1,500. 
B) 90% of the tax due for the current year is paid. 
C) 90% of the tax due for the current year is paid when computed on an annualized basis. 
D) 100% of the actual tax liability for the prior year is paid. 
A) estimated tax is less than $1,500. 
B) 90% of the tax due for the current year is paid. 
C) 90% of the tax due for the current year is paid when computed on an annualized basis. 
D) 100% of the actual tax liability for the prior year is paid.

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

Self-employment taxes include components for

Accepted Answer

A) Medicare hospital insurance and SUTA. 
B) Social Security and FUTA. 
C) FICA and FUTA. 
D) Social Security and Medicare hospital insurance. 
A) Medicare hospital insurance and SUTA. 
B) Social Security and FUTA. 
C) FICA and FUTA. 
D) Social Security and Medicare hospital insurance.

Question 7

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

Accepted Answer

A) 20% of the net regular tax liability above $20,000. 
B) 25% of the net regular tax liability above $20,000. 
C) 20% of the net regular tax liability above $25,000. 
D) 25% of the net regular tax liability above $25,000. 
A) 20% of the net regular tax liability above $20,000. 
B) 25% of the net regular tax liability above $20,000. 
C) 20% of the net regular tax liability above $25,000. 
D) 25% of the net regular tax liability above $25,000.

Question 8

For purposes of the AMT,the standard deduction,but not the personal and dependency exemptions,is allowed.

Accepted Answer

A) True 
 B)False

Question 9

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?

Accepted Answer

A) $4,000 
B) $12,000 
C) $14,000 
D) $42,000 
A) $4,000 
B) $12,000 
C) $14,000 
D) $42,000

Question 10

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

Accepted Answer

A) An ice cream producer develops a new type of packaging that will keep ice cream frozen while driving home from the grocery store. 
B) An ice cream producer develops a new design on the package that will be more pleasing to the culture of a new market it is entering. 
C) An ice cream producer develops a new marketing campaign to introduce its brand to a new region of the country it is entering. 
D) All of the above qualify as research expenditures for the research credit. 
A) An ice cream producer develops a new type of packaging that will keep ice cream frozen while driving home from the grocery store. 
B) An ice cream producer develops a new design on the package that will be more pleasing to the culture of a new market it is entering. 
C) An ice cream producer develops a new marketing campaign to introduce its brand to a new region of the country it is entering. 
D) All of the above qualify as research expenditures for the research credit.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) geothermal heat pumps 
B) residential wind property 
C) metal or asphalt roofs with special coatings 
D) solar hot water heaters 
A) geothermal heat pumps 
B) residential wind property 
C) metal or asphalt roofs with special coatings 
D) solar hot water heaters

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Annie has taxable income of $100,000,a regular tax liability of $21,176,a positive AMT adjustment due to limitations on itemized deductions of $20,000,and tax preferences of $25,000 in 2014.Annie is single and takes a $3,950 personal exemption for herself only. What is Annie's AMT for 2014?

Accepted Answer

@#IMG-DLM& *$52,800

Question 16

Joe has $130,000 net earnings from a sole proprietorship.Joe's self-employment tax (rounded)for 2014 is

Accepted Answer

A) $17,990. 
B) $18,368. 
C) $19,890. 
D) None of the above. 
A) $17,990. 
B) $18,368. 
C) $19,890. 
D) None of the above.

Question 17

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 2014 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 2014 is

Accepted Answer

A) $1,500. 
B) $2,000. 
C) $2,500. 
D) $5,000. 
A) $1,500. 
B) $2,000. 
C) $2,500. 
D) $5,000.

Question 18

George and Meredith who are married,have a regular tax liability of $22,963,taxable income of $125,000,tax preferences of $25,000,and positive adjustments attributable to limitations on itemized deductions of $18,700 this year.They claim $11,850 of personal and dependency exemptions for themselves and their 20-year old dependent daughter.What is George and Meredith's alternative minimum tax for 2014?

Accepted Answer

@#IMG-DLM& *$82,100 - [.25 × (

Question 19

In computing AMTI,adjustments are

Accepted Answer

A) limited. 
B) added only. 
C) subtracted only. 
D) either added or subtracted. 
A) limited. 
B) added only. 
C) subtracted only. 
D) either added or subtracted.

Question 20

The maximum amount of the American Opportunity Tax Credit for each qualified student is

Accepted Answer

A) $1,500. 
B) $2,000. 
C) $2,500. 
D) $3,000. 
A) $1,500. 
B) $2,000. 
C) $2,500. 
D) $3,000.

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

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

A self-employed individual has earnings from his business of $300,000. For the earnings in excess of the $117,000,he will only have to pay the 2.9% Medicare tax.

Individuals without children are eligible for the earned income credit if they meet all the following conditions except

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

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

Self-employment taxes include components for

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

For purposes of the AMT,the standard deduction,but not the personal and dependency exemptions,is allowed.

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

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

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

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

Annie has taxable income of $100,000,a regular tax liability of $21,176,a positive AMT adjustment due to limitations on itemized deductions of $20,000,and tax preferences of $25,000 in 2014.Annie is single and takes a $3,950 personal exemption for herself only. What is Annie's AMT for 2014?

Joe has $130,000 net earnings from a sole proprietorship.Joe's self-employment tax (rounded)for 2014 is

In computing AMTI,adjustments are

The maximum amount of the American Opportunity Tax Credit for each qualified student is

Tax Research

an Introduction to Taxation

Corporate Formations and Capital Structure

I: Determination of Tax

The Corporate Income Tax

Gross Income: Inclusions

Corporate Nonliquidating Distributions

Gross Income: Exclusions

Other Corporate Tax Levies

Property Transactions: Capital Gains and Losses

Corporate Liquidating Distributions

Deductions and Losses

Corporate Acquisitions and Reorganizations

Itemized Deductions

Consolidated Tax Returns

Losses and Bad Debts

Partnership Formation and Operation

Employee Expenses and Deferred Compensation

Special Partnership Issues

Depreciation cost Recovery amortization and Depletion

S Corporations

Accounting Periods and Methods

The Gift Tax

Property Transactions: Nontaxable Exchanges

The Estate Tax

Property Transactions: Section 1231 and Recapture

Income Taxation of Trusts and Estates

Administrative Procedures

Filters