Ch. 13: ACC 4301 Individual Taxes Income 1. Gray Corporation has $110,000 worth
ID: 2449769 • Letter: C
Question
Ch. 13: ACC 4301 Individual Taxes Income
1. Gray Corporation has $110,000 worth of excess qualified incremental research expenditures. What is Gray's incremental research credit?
$55,000
$20,000
$50,000
$22,000
2. Teddy and Abby are married and file a joint return. Abby works and she contributes $2,300 to her Section 401(k) plan. Teddy does not work. If their AGI is $37,000, what is the amount of Abby's retirement plan contribution credit?
$0
$1,150
$400
$460
3. In 2015, Ramon and Michelle pay $10,000 in adoption fees and $5,500 in legal fees to adopt a new baby. How much is their adoption expense credit before considering any AGI limitations?
$13,400
$10,000
$5,500
$15,500
4. Green Company established a qualified retirement plan for its 20 employees. It paid $2,500 to startup this plan. What is Green's small employer pension credit for qualified startup costs?
$2,500
$0
$500
$1,250
5. The basic research credit rate is:
10%
20%
50%
15%
6. Victor is 68-years-old and single. He has adjusted gross income of $13,000 and does not receive any social security benefits. What is Victor's tax credit for the elderly?
$0
$338
$825
$750
7. Yellow Corporation incurred the following research expenses: (1) $100,000 in-house expenditures and (2) $60,000 paid to Breen University for contract research. What is the total of Yellow's qualified research expenditures?
$160,000
$139,000
$60,000
$100,000
8. Which of the following is a refundable credit?
Foreign tax credit
Withholding
Rehabilitation credit
Child and dependent care credit
9. Tim is 68-years-old and single. He has adjusted gross income of $5,000 and does not receive any social security benefits. What is Tim's tax credit for the elderly?
$1,125
$375
$0
$750
10. During the current year, Green Hills Corporation had $250,000 in income from Ireland, which imposes a 10% income tax on income earned within its borders. Thus, the income tax imposed by Ireland on Green Hills Corporation is $25,000 ($250,000 x 10%). Green Hills also had income of $500,000 from within the United States. The tentative U.S. tax on the $750,000 total income is $255,000. How much is Green Hill's foreign tax credit for the year?
$8,333
$85,000
$0
$25,000
11. John is single and has one child who is qualified for the American Opportunity Credit. In the fall of 2015, John pays $2,400 in tuition for his son to attend college. John's AGI for 2015 is $105,000. What is his American Opportunity Credit for 2015?
$0
$2,000
$1,900
$800
12. Bill and Betty have one child, Bobby, who is six-years-old. Bill's earnings are $15,000 and Betty's are $14,000. Other income includes interest on a savings account at San Diego Federal Savings of $450. They paid $2,600 to the Tiny Tot Day Care Center to keep Bobby so they could both work. What is their childcare credit?
$728
$910
$884
$702
13. Sheila spends $60,000 to rehabilitate a commercial building originally placed in service in 1910. The building is not a certified historic structure. What is Sheila's rehabilitation credit on the building?
$9,000
$0
$12,000
$6,000
14. Which of the following taxpayers would not be subject to the penalty for the underpayment of estimated tax in 2015?
The taxpayer whose CPA forget to fill out the appropriate forms and send them to the taxpayer.
The taxpayer who does not have the cash to make the payments.
The taxpayer whose estimated payments this year are equal to 70% of the current tax liability.
The taxpayer whose estimated payments are 115% of his liability for the prior year.
15. Toni has $75,000 net earnings from self-employment. What is her total self-employment tax in 2015?
$9,000
$5,299
$10,597
$9,975
16. Lew and Martha are married and have AGI of $70,000. They have two children, Bill and Betty. In fall 2015, Bill started his first year of college and Betty was enrolled in graduate school working on her master's degree. Bill has qualified tuition expenses of $2,700 and Betty's are $3,000 for the fall semester. Bill and Betty are dependents of Lew and Martha and both are full-time students. What is Lew and Martha's American Opportunity Credit for 2015?
$2,175
$675
$1,700
$2,675
17. Green Corporation's general business credit is $75,000. The net income tax for the year is $125,000 and the tentative AMT is $70,000. Assuming Green has no other tax credits for the year, what is the amount of general business credit allowed?
$70,000
$75,000
$50,000
$55,000
18. John and Fay are married and file a joint return showing AGI of $105,000. Their children are ages 12, 13, 17, and 20. The 20-year-old is a full-time student at State University. What amount may John and Fay take as a child tax credit in 2015?
$4,000
$1,000
$2,000
$3,000
19. Teri, a single taxpayer, maintains a household for her child, who is 13-years-old. Teri's adjusted gross income is $8,000, all from salary. How much is Teri's 2015 earned income credit?
$2,720
$0
$3,050
$3,200
20. Sheila spends $60,000 to rehabilitate a commercial building originally placed in service in 1910. What is Sheila's rehabilitation credit if the building is a certified historic structure?
$6,000
$0
$12,000
$9,000
21. White, an eligible small business, made $12,000 of capital improvements that qualify for the disabled access credit. What is the amount of White's credit?
$5,750
$6,000
$5,000
$0
22. Gerard and his wife, Wilma, pay $3,000 to keep their son, Gerard Jr., in a day care center. Gerard Jr. is five-years-old. Gerard's earnings are $11,000 and Wilma's earnings are $1,500. What amount of childcare credit can Gerard and Wilma claim on a joint return assuming no other income or losses for the year?
$1,050
$0
$1,500
$525
23. Orange Corporation's general business credit is $75,000. The net income tax for the year is $125,000 and the tentative AMT is $15,000. Assuming Orange has no other tax credits for the year, what is the amount of general business credit allowed?
$110,000
$100,000
$15,000
$75,000
24. In 2015, Ray and Monica pay $8,000 in adoption fees and $5,500 in legal fees to adopt a new baby. If Ray and Michelle's AGI is $204,520, what is the amount of their adoption expense credit?
$12,224
$0
$2,810
$13,190
25. Blue Company constructed a childcare facility for $600,000 to be used by it employees with preschool- aged children while they are at work. Blue paid $200,000 for childcare workers and other administrative costs to run the child care center for the year. What is Blue's employer-provided childcare credit?
$200,000
$170,000
$50,000
$150,000
26. Ted and his wife, Rita, pay $3,000 to keep their son, Ted Jr., in a day care center. Ted Jr. is five-years-old. Ted's earnings are $11,000 and Rita's earnings are $15,000. What amount of childcare credit can Ted and Rita claim on a joint return assuming no other income or losses for the year?
$1,050
$870
$840
$1,020
27. Bob and Jane have two children, ages 10 and 12. Their AGI for 2015 is $115,300. What is Bob and Jane's child tax credit?
$300
$1,000
$1,700
$2,000
28. Luis and Marta are married and have AGI of $70,000. They have two children, Benito and Betty. In fall 2015, Benito started his first year of college and Betty was enrolled in graduate school. Benito's qualified tuition expenses were $2,700 and Betty's were $3,000 for the fall semester. Benito and Betty are dependents of Luis and Marta and both are full-time students in California. What is Luis and Marta's lifetime learning credit for 2015?
$3,300
$600
$2,000
$940
29. During 2015, Jan earned $65,000 in wages subject to FICA. Jan also had net earnings of $50,000 from an outside consulting business. Jan sold IBM stock for a gain of $4,000 during the year. What is the amount of Jan's net earnings from self-employment for purposes of determining the Social Security portion of the self-employment tax?
$53,500
$46,000
$0
$50,000
Explanation / Answer
1. Gray Corporation has $110,000 worth of excess qualified incremental research expenditures. What is Gray's incremental research credit?
Incremental research credit = (QRE-Base Amount)*20%
Incremental research credit = 110000*20%
Incremental research credit = 22000
Answer
22000
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