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Exam 12: Tax Credits and Payments

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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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The earned income credit,a form of a negative income tax,is a refundable credit.

A) True
B) False

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Question 33

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Child care payments to a relative are not eligible for the credit for child and dependent care expenses if the relative is a child (under age 19)of the taxpayer.

During the year,Purple Corporation (a U.S.Corporation) has U.S.-source income of $1,800,000 and foreign income of $600,000.The foreign-source income generates foreign income taxes of $150,000.The U.S.income tax before the foreign tax credit is $816,000.Purple Corporation's foreign tax credit is:

If a taxpayer chooses not to claim a foreign tax credit,the foreign income taxes paid can be claimed as a deduction.

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

Which of the following statements is true regarding the education tax credits?

Amber is in the process this year of renovating the office building (originally placed in service in 1976) used by her business.Because of current Federal Regulations that require the structure to be accessible to handicapped individuals,she incurs an additional $11,000 for various features,such as ramps and widened doorways,to make her office building more accessible.The $11,000 incurred will produce a disabled access credit of what amount?

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

Golden Corporation is an eligible small business for purposes of the disabled access credit.During the year,Golden makes the following expenditures on a structure originally placed in service in 1988. In addition,$8,000 was expended by Golden on a building originally placed in service in the current year to ensure easy accessibility by disabled individuals.Calculate the amount of the disabled access credit available to Golden Corporation.

Explain the purpose of the tax credit for rehabilitation expenditures and describe the general characteristics of its computation.

The low-income housing credit is available to low-income tenants who reside in qualifying low-income housing.

Which,if any,of the following correctly describes the earned income credit?

In March 2011,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 2011.Only one of the individuals continued to work for Gray Corporation in 2012,earning $9,000 during the year.No additional workers were hired in 2012.Gray Corporation's work opportunity tax credit amounts for 2011 and 2012 are:

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:

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:

Which of the following best describes the treatment applicable to unused business credits?

The child tax credit is based on the number of the taxpayer's qualifying children under age 17.

Because current U.S.corporate income tax rates are higher than many foreign corporate income tax rates,the overall limitation does not yield a lower foreign tax credit than the amount of foreign taxes actually paid.

Jermaine and Kesha are married,file a joint tax return,have AGI of $82,500,and have two children.Devona is beginning her freshman year at State University during Fall 2011,and Arethia is beginning her senior year at Northeast University during Fall 2011 after having completed her junior year during the spring of that year.Both Devona and Arethia are claimed as dependents on their parents' tax return.Devona's qualifying tuition expenses and fees total $4,000 for the fall semester,while Arethia's qualifying tuition expenses and fees total $6,200 for each semester during 2011.Full payment is made for the tuition and related expenses for both children during each semester.The American Opportunity credit available to Jermaine and Kesha for 2011 is: