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Exam 12: Tax Credits and Payments

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Question 41

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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.

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The expenditures of $8,000 incurred on ...

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Question 42

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A taxpayer who meets the age requirement and receives no Social Security benefits will be entitled to the full tax credit for the elderly.

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B) False

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Question 43

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The maximum credit for child and dependent care expenses is $2,100 if only one spouse is employed and the other spouse is a full-time student.

The disabled access credit is computed at the rate of 50% of all access expenditures incurred by the taxpayer during the year.

An employer calculates the amount of income tax withheld from salary or wages based on the information an employee provides on the following form:

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

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.

Unused foreign tax credits can be carried back one year and forward fifteen years.

Qualifying tuition expenses paid from the proceeds of a tax-exempt scholarship do not give rise to an education tax credit.

Some (or all)of the tax credit for rehabilitation expenditures will have to be recaptured if the rehabilitated property is disposed of prematurely or if it ceases to be qualifying property.

Black Company paid wages of $360,000,of which $80,000 was qualified wages for the work opportunity tax credit under the general rules.Black Company's deduction for wages for the year is:

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

The purpose of the work opportunity tax credit is to encourage employers to hire individuals from specified target groups traditionally subject to high rates of unemployment.

Describe the withholding requirements applicable to employers.

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

Dabney and Nancy are married,both gainfully employed,and have two children who are 3 and 6 years old.Dabney's salary is $35,000 while Nancy's salary is $40,000.During the year,they spend $7,000 for child care expenses that are required so both of them can work outside of the home.Calculate the credit for child and dependent care expenses.

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.

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

During the year,Tulip,Inc. ,incurs the following research expenditures: Tulip's qualifying research expenditures for the year are:

Kevin and Sue have two children,ages 8 and 14.They spend $6,200 per year on eligible employment related expenses for the care of their children after school.Kevin and Sue each earns a salary of $18,000.What is the amount of the credit for child and dependent care expenses?