Question 1

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

Accepted Answer

A) charitable contributions. 
B) gambling losses. 
C) qualified housing interest. 
D) personal property taxes. 
A) charitable contributions. 
B) gambling losses. 
C) qualified housing interest. 
D) personal property taxes.

Question 2

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

Accepted Answer

A) taxable income. 
B) alternative minimum tax base. 
C) alternative minimum taxable income. 
D) tentative alternative taxable income. 
A) taxable income. 
B) alternative minimum tax base. 
C) alternative minimum taxable income. 
D) tentative alternative taxable income.

Question 3

If an employee has more than one employer during the year,all employers must withhold federal income taxes but only one employer must withhold FICA tax.

Accepted Answer

A) True 
 B)False

Question 4

Marvin and Pamela are married,file a joint return,and have two children,ages 9 and 11.Their combined AGI is $65,000.Marvin's earned income is $40,000; Pamela's is $25,000.They incur $6,500 of child-care expenses to enable them to be employed during the current year.Their child and dependent care credit is

Accepted Answer

A) $1,200. 
B) $1,300. 
C) $1,800. 
D) $6,000. 
A) $1,200. 
B) $1,300. 
C) $1,800. 
D) $6,000.

Question 5

A taxpayer who paid AMT in prior years,but is not subject to the AMT in the current year,may be entitled to an AMT credit against his regular tax liability in the current year.

Accepted Answer

A) True 
 B)False

Question 6

Reva and Josh Lewis had alternative minimum taxable income of $350,000 in 2014 and file a joint return.For purposes of computing the alternative minimum tax,their exemption is

Accepted Answer

A) $33,725. 
B) $52,800. 
C) $48,375. 
D) $82,100. 
A) $33,725. 
B) $52,800. 
C) $48,375. 
D) $82,100.

Question 7

Hong earns $127,300 in her job as a physician's assistant.She also has her own business selling cosmetics.This business generated $10,000 of earnings.What is Hong's self-employment tax for 2014?

Accepted Answer

A) $268 
B) $290 
C) $1,412 
D) $1,530 
A) $268 
B) $290 
C) $1,412 
D) $1,530

Question 8

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

Accepted Answer

File Form 6251 when:1.An AMT tax liabili

Question 9

A taxpayer will be ineligible for the earned income credit if he or she has disqualified investment income of more than $3,350 in 2014.Disqualified income includes all the following except

Accepted Answer

A) net capital gains. 
B) tax-exempt interest. 
C) net rental income. 
D) self-employment income. 
A) net capital gains. 
B) tax-exempt interest. 
C) net rental income. 
D) self-employment income.

Question 10

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

Accepted Answer

A) $ 0. 
B) $1,000. 
C) $1,500. 
D) $2,500. 
A) $ 0. 
B) $1,000. 
C) $1,500. 
D) $2,500.

Question 11

Marguerite and Josephus have two children,ages 13 and 10.Their modified AGI is $120,500.What is their child tax credit?

Accepted Answer

A) $900 
B) $1,000 
C) $2,000 
D) None of the above. 
A) $900 
B) $1,000 
C) $2,000 
D) None of the above.

Question 12

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 $16,000.What is the corporation's foreign tax credit?

Accepted Answer

A) $2,000 
B) $14,000 
C) $16,000 
D) $42,000 
A) $2,000 
B) $14,000 
C) $16,000 
D) $42,000

Question 13

Which one of the following is a refundable credit?

Accepted Answer

A) earned income credit 
B) child and dependent care credit 
C) lifetime learning credit 
D) credit for the elderly and disabled 
A) earned income credit 
B) child and dependent care credit 
C) lifetime learning credit 
D) credit for the elderly and disabled

Question 14

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.

Accepted Answer

Ceiling on application of foreign tax cr

Question 15

Discuss the tax planning techniques available to a U.S.citizen who is on a foreign job assignment.

Accepted Answer

U.S.citizens who are on foreign job assi

Question 16

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.

Accepted Answer

A) True 
 B)False

Question 17

Qualified tuition and related expenses eligible for the American Opportunity Tax Credit are limited to those incurred the first two years of postsecondary education.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Octo Corp.purchases a building for use in its business at a cost of $100,000.The building was built in 1930 and needs substantantial work so it can be used.Octo spends $150,000 on qualifying renovations. Octo will earn a rehabilitation credit of

Accepted Answer

A) $15,000. 
B) $25,000. 
C) $5,000. 
D) $30,000. 
A) $15,000. 
B) $25,000. 
C) $5,000. 
D) $30,000.

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

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

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

If an employee has more than one employer during the year,all employers must withhold federal income taxes but only one employer must withhold FICA tax.

A taxpayer who paid AMT in prior years,but is not subject to the AMT in the current year,may be entitled to an AMT credit against his regular tax liability in the current year.

Reva and Josh Lewis had alternative minimum taxable income of $350,000 in 2014 and file a joint return.For purposes of computing the alternative minimum tax,their exemption is

Hong earns $127,300 in her job as a physician's assistant.She also has her own business selling cosmetics.This business generated $10,000 of earnings.What is Hong's self-employment tax for 2014?

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

A taxpayer will be ineligible for the earned income credit if he or she has disqualified investment income of more than $3,350 in 2014.Disqualified income includes all the following except

Marguerite and Josephus have two children,ages 13 and 10.Their modified AGI is $120,500.What is their child tax credit?

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 $16,000.What is the corporation's foreign tax credit?

Which one of the following is a refundable credit?

Discuss the tax planning techniques available to a U.S.citizen who is on a foreign job assignment.

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.

Qualified tuition and related expenses eligible for the American Opportunity Tax Credit are limited to those incurred the first two years of postsecondary education.

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

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

Octo Corp.purchases a building for use in its business at a cost of $100,000.The building was built in 1930 and needs substantantial work so it can be used.Octo spends $150,000 on qualifying renovations. Octo will earn a rehabilitation credit of

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