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Exam 12: Tax Credits and Payments

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Question 41

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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:

A) $8,750.
B) $4,500.
C) $4,375.
D) $4,250.
E) None of the above.

F) A) and E)
G) B) and D)

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Question 42

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

A) Unused amounts are carried forward indefinitely.
B) Unused amounts are first carried back one year and then forward for 20 years.
C) Unused amounts are first carried back one year and then forward for 10 years.
D) Unused amounts are first carried back three years and then carried forward for 15 years.
E) None of the above.

F) None of the above
G) A) and D)

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Question 43

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All taxpayers are eligible to take the basic research credit.

Black Company paid wages of $180,000,of which $40,000 was qualified wages for the work opportunity tax credit under the general rules.Black Company's deduction for wages for the year is:

The purpose of the tax credit for rehabilitation expenditures is to encourage the relocation of businesses from older,economically distressed areas (i.e.,inner city) to newer locations.

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

Employers are encouraged by the work opportunity tax credit to hire individuals who have been long-term recipients of family assistance welfare benefits.

Roger is considering making a $6,000 investment in a venture that its promoter promises will generate immediate tax benefits for him.Roger,who does not anticipate itemizing his deductions,is in the 30% marginal income tax bracket.If the investment is of a type that produces a tax credit of 40% of the amount of the expenditure,by how much will Roger's tax liability decline because of the investment?

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

The ceiling amounts and percentages for 2017 for the two portions of the self-employment tax are: ​ Social Security portion Medicare portion

Describe the withholding requirements applicable to employers.

Juan refuses to give the bank where he maintains a savings account his Social Security number.Juan is subject to backup withholding for the interest earned on the savings account.

A taxpayer who qualifies for the low-income housing credit claims the credit over a 20-year period.

Qualified rehabilitation expenditures include the cost of acquiring the building,but not the cost of acquiring the land.

In describing FICA taxes,which (if any) of the following statements is incorrect?

All foreign taxes qualify for the foreign tax credit.

Explain the purpose of the disabled access credit and describe the general characteristics of its computation.

Cardinal Company incurs $800,000 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.Assuming Cardinal claims the credit for employer-provided child care this year,its basis in the newly constructed facility is $640,000.

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

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