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Exam 13: Tax Credits and Payment Procedures

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Question 31

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Some foreign taxes do not qualify for the foreign tax credit.

A) True
B) False

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Question 32

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A taxpayer who qualifies for the low-income housing credit claims the credit over a 15-year period.

A) True
B) False

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Question 33

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Describe the withholding requirements applicable to employers.

A taxpayer may qualify for the credit for child and dependent care expenses if the taxpayer's dependent is age 13 or less.

Child and dependent care expenses do not include amounts paid for general household services.

The earned income credit is available only if the taxpayer has at least one qualifying child in the household.

Expenses that are reimbursed by a taxpayer's employer under a dependent care assistance program canalso qualify for the credit for child and dependent care expenses.

Identify the statement below that is false.

Several years ago,Sarah purchased a structure for $150,000 that was originally placed in service in 1929.In the current year,she incurred qualifying rehabilitation expenditures of $200,000.The amount of the tax credit for rehabilitation expenditures,and the amount by which the building's basis for cost recovery would increase as a result of the rehabilitation expenditures are the following amounts:

Even though an item of income is not subject to income tax withholding by a taxpayer's employer,it may be subject to the income tax.

Which of the following statements concerning the credit for child and dependent care expenses is not correct?

The American Opportunity credit is available per eligible student,while the lifetime learning credit is calculated per taxpayer.

For the current year,the base amount for the Social Security portion (old age,survivors,and disability insurance)is different from that for the Medicare portion of FICA.

In March 2012,Gray Corporation hired two individuals,both of whom were certified as long-term recipients of family assistance benefits.Each employee was paid $11,000 during 2012.Only one of the individuals continued to work for Gray Corporation in 2013,earning $9,000 during the year.No additional workers were hired in 2013.Gray Corporation's work opportunity tax credit amounts for 2012 and 2013 are:

An eligible taxpayer may elect to receive advance payments of the earned income credit from his or her employer.

The maximum child tax credit under current law is $1,200 per qualifying child.

During the year,Green Corporation (a U.S.corporation) has U.S.-source income of $750,000 and foreign income of $500,000.The foreign-source income generates foreign income taxes of $240,000.The U.S.income tax before the foreign tax credit is $425,000.Green Corporation's foreign tax credit is:

Certain situations exist where the wage-bracket table method of determining income tax withholdings cannot be used.

Cheryl is single,has one child (age 6) ,and files as head of household during 2012.Her salary for the year is $19,000.She qualifies for an earned income credit of the following amount:

The work opportunity tax credit is available only for wages paid to qualifying individuals during their first year of employment.