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ACCT 3013 TAX ACCOUNTING CHAPTER 8 LEARNSMART EXAM QUESTIONS AND 100% VERIFIED ANSWERS
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ACCT 3013 TAX ACCOUNTING CHAPTER 8 LEARNSMART EXAM QUESTIONS AND 100% VERIFIED ANSWERS...
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Christina's taxable income is $35,000, Charles' is $50,000, and Chris' is$500,000. Each of these taxpayers earned $1,000 of long-term capital
gain income in 2018. Which of the following answers is correct regarding
the amount of tax to be paid? - ANSWER Chris will pay $200 in tax
A tax ______ reduces a taxpayer's liability dollar for dollar. A tax _____
reduces taxable income, resulting in a tax savings that is dependent on
the taxpayer's marginal tax bracket - ANSWER Credit; deduction
Which of the following expenses typically qualify for the Lifetime
Learning Credit? - ANSWER 1) Tuition for graduate courses
2) Tuition for full-time enrollment at a university
3) Fees for consulting professional education required for job
Sole proprietors and independent contractors pay ____-_______ taxes
on their net profit which represents both the employee and employer
component of FICA and Medicare - ANSWER Self-employment
Bruce is a part-time student (more than half time) enrolled at a qualified
postsecondary educational institution. He files as a single taxpayer and
cannot be claimed as a dependent on any other tax return. He paid
$3,000 in qualified education expenses during the year. What is the
amount of his American Opportunity Credit? - ANSWER $2,250
Choose the deductions that reduce both regular taxable income and
AMTI - ANSWER 1) Charitable contributions
2) Casualty and theft losses
3) Gambling losses
4) Home equity interest - loan used to substantially improve the house
5) Home mortgage interest
Investment interest expense that was NOT deductible for regular taxable
income will be deductible for AMTI to the extent it was attributable to
, interest income that was _____ ______ for regular tax purposes, but is
______ for AMTI - ANSWER Tax exempt; taxable
Which of the following statements BEST describes the treatment of
medical expenses for alternative minimum taxable income? - ANSWER
Medical expenses are deductible for AMTI, subject to a 7.5% of AGI
floor, for all taxpayers regardless of age
How do self-employed independent contractors deduct their business
expenses? - ANSWER For AGI against business income
The _____ and _______ _______ credit helps taxpayers pay the cost of
providing care for dependents, so that taxpayers can work - ANSWER
Child; dependent care
The following statement is INCORRECT regarding the child and
dependent care credit? - ANSWER The credit completely phases out
for high income taxpayers
Which of the following individuals is eligible to receive (or qualify their
parents to receive) the American Opportunity Credit? - ANSWER Kim is
single, works full time, and goes to college half time for her second year
at LSU. She provides over half of her own support
The following expenses qualify for the American Opportunity Credit? -
ANSWER 1) Tuition
2) Required fees
3) Textbooks
The lifetime learning credit is equal to ________ of eligible expenses up
to an annual maximum of _____ of eligible expenses in one year -
ANSWER 20%; $10,000
The ___ ______ credit is a maximum credit of $2,000 per taxpayer,
while the ______ _______ credit is a maximum credit of $2,500 per
qualifying student - ANSWER 1) Lifetime learning
2) American opportunity
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