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Exam 12: Tax Credits and Payments

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Question 51

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A LIFO method is applied to general business credit carryovers,carrybacks,and utilization of credits earned during a particular year.

A) True
B) False

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Question 52

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An individual generally may claim a credit for adoption expenses in the year in which the expenses are paid.

A) True
B) False

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Question 53

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The tax benefits resulting from tax credits and tax deductions are affected by the tax rate bracket of the taxpayer.

BlueCo incurs $500,000 during the year to construct a facility that will be used exclusively for the care of its employees' pre-school age children during normal working hours.The credit for employer-provided child care available to BlueCo this year is $100,000.

Green Company,in the renovation of its building,incurs $9,000 of expenditures that qualify for the disabled access credit.The disabled access credit is:

Refundable tax credits include the:

Qualified research and experimentation expenditures are not only eligible for the 20% tax credit,but also can be expensed in the year incurred.

An employer's tax deduction for wages is not affected by the work opportunity tax credit.

During 2010,Eleanor earns $146,000 in wages as an employee of an accounting firm.She also earns $26,000 in gross income from an outside consulting service she operates.Deductible expenses paid in connection with the consulting service amount to $6,000.Eleanor also has a recognized long-term capital gain of $1,000 from the sale of a stock investment.She must pay a self-employment tax on:

Discuss the treatment of unused general business credits.

The tax credit for rehabilitation expenditures for certified historic structures does not differ from that for qualifying structures that are not certified historic structures.

The incremental research activities credit is 20% of the qualified research expenses that exceed the base amount.

Ahmad is considering making a $10,000 investment in a venture which its promoter promises will generate immediate tax benefits for him.Ahmad,who normally itemizes his deductions,is in the 28% marginal tax bracket.If the investment is of a type where the taxpayer may claim either a tax credit of 25% of the amount of the expenditure or an itemized deduction for the amount of the investment,what treatment normally would be most beneficial to Ahmad and by how much will Ahmad's tax liability decline because of the investment?

Which of the following correctly reflects current rules regarding estimated tax payments for individuals?

During the year,Green Corporation (a U.S.corporation) has U.S.-source income of $1,500,000 and foreign income of $1,000,000.The foreign-source income generates foreign income taxes of $480,000.The U.S.income tax before the foreign tax credit is $850,000.Green Corporation's foreign tax credit is:

Allan has a tentative general business credit of $220,000 for the current year.His net regular tax liability before the general business credit is $250,000,and his tentative minimum tax is $200,000.Compute Allan's allowable general business credit for the year.

The components of the general business credit include all of the following except:

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

A small employer incurs $1,800 for consulting fees related to establishing a qualified retirement plan for its 85 employees.As a result,the employer may claim the credit for small employer pension plan startup costs for $900.

Which of the following statements regarding the adoption expenses credit is not true?