Question : 41. Steve goes to Tri-State University and pays $40,000 in tuition. : 1313562

41. Steve goes to Tri-State University and pays $40,000 in tuition. Steve works a part-time job to pay for his schooling and has an AGI of $17,000. How much is his American Opportunity Credit?

a. $2,000

b. $2,500

c. $4,000

d. $1,000

e. He does not qualify for the American Opportunity Credit.

42. Taxpayer Q has net taxable income of $30,000 from Country Y which imposes a 40 percent income tax. In addition to the income from Country Y, taxpayer Q has net taxable income from U.S. sources of $120,000, and U.S. tax liability, before the foreign tax credit, of $41,750. What is the amount of Q’s foreign tax credit?

a. $2,400

b. $8,350

c. $12,000

d. $30,000

e. None of the above

43. Jim has foreign income. He earns $26,000 from Country A which taxes the income at a 20 percent rate. He also has income from Country B of $18,000. Country B taxes the $18,000 at a 10 percent rate. His U.S. taxable income is $90,000, which includes the foreign income. His U.S. income tax on all sources of income before credits is $19,000. What is his foreign tax credit?

a. $6,500

b. $7,000

c. $9,289

d. $19,000

e. Jim does not qualify for a foreign tax credit.

44. In the case of the adoption of a child who is not a U.S. citizen or resident of the U.S., the credit for qualified adoption expenses is available:

a. In the first year the expenses are paid.

b. Each year expenses are paid.

c. In the last year expenses are paid.

d. In the year the adoption becomes final.

45. Carla and Bob finalized an adoption in 2014. Their adoption fees totaled $9,500. They have AGI of $207,000 for 2014. What is their adoption credit?

a. $6,550

b. $7,025

c. $7,334

d. $9,500

46. A tax credit is allowed for qualified adoption expenses paid by taxpayers:

a. And an additional credit is allowed for qualified adoption expenses paid for by taxpayers’ employers.

b. And an income exclusion is allowed for qualified adoption expenses paid for by taxpayers’ employers.

c. And is available each year qualifying expenses are incurred.

d. And is not subject to a phase-out based on adjusted gross income.

47. Taxpayers are allowed two tax breaks for adoption expenses. They are allowed: 

Qualified Expenses

Paid personallyPaid by employer

a. ?

CreditCredit

?

?

b. ?

ExclusionExclusion

?

?

c. ?

CreditExclusion

?

?

d. ?

ExclusionCredit

?

?

48. Choose the correct statement:

a. A taxayer may receive a 30-percent credit for installing energy-efficient window shades.

b. A taxpayer may receive a 30-percent credit for installing a windmill, which generates electricity, at his vacation home.

c. A taxpayer may receive a 30-percent credit for installing a solar water-heating panel for his swimming pool.

d. A taxpayer may receive a 30-percent credit for the purchase of a plug-in electric vehicle.

49. Which of the following is not an adjustment or tax preference item for 2014 for purposes of the individual alternative minimum tax (AMT)?

a. State income tax refunds

b. Certain passive losses

c. Miscellaneous itemized deductions

d. Cash charitable contributions

e. All of the above are adjustment or tax preference items for AMT.

50. Which of the following itemized deductions may not be deducted in computing the individual alternative minimum tax?

a. Qualified home mortgage interest

b. State income taxes

c. Medical expenses (limited to 10 percent of AGI)

d. Charitable deductions

e. All of the above