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?

When a husband and wife file a joint return and both have self-employment income,the self-employment tax must be computed separately.

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.

Brad and Shelly's daughter is starting her freshman year of college. Brad and Shelly will be able to claim the American Opportunity Tax Credit for a percentage of the cost of tuition and room and board.

Rex has the following AMT adjustments: -Depreciation of real property acquired in 1996 using MACRS is $22,000 while depreciation for AMT purposes is $15,000. -R&E expenditures amounting to $60,000 are expensed. The net adjustment is

All of the following are self-employment income except

During the year,Jim incurs $50,000 of rehabilitation expenditures in connection with a certified historic structure used in his business.The adjusted basis of the structure was $40,000 at the time the rehabilitation began. a.What is the amount,if any,of his rehabilitation credit for the year? b.What is the depreciable basis of the rehabilitation expenditures?

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?

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

The alternative minimum tax applies to individuals,corporations,estates,and trusts.

The general business credits are refundable credits.

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

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

Layla earned $20,000 of general business credits from her sole proprietorship.Her regular tax liability is $45,000,and her tentative minimum tax is $49,000.During the current year Layla will apply general business credits of

Max and Alexandra are married and incur $5,500 of qualifying expenses to care for their two children,ages 2 and 5.Max's earned income is $35,000 and Alexandra's earnings from a part-time job are $5,000.What is the amount of the qualifying expenses for purposes of computing the child and dependent care credit?

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

Nonrefundable tax credits

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

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?

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.