1. Joan, a single mother, has AGI of $85,000 in 2014. In September 2014, she pays $5,000 in qualified tuition for her dependent son who just started at Big University. What is Joan’s American Opportunity credit for 2014?
e. Some other amount
2. Becky, a college freshman, works part-time and pays $1,600 of her college tuition expenses. Although Becky files her own tax return, her parents claim her as a dependent on their tax return. Becky’s parents have AGI of $50,000. What is the amount of American Opportunity tax credit her parents can claim on their tax return for the tuition Becky paid?
e. Some other amount
3. Taxpayer L has income of $55,000 from Norway, which imposes a 30 percent income tax, and income of $45,000 from France, which imposes a 40 percent income tax. L has taxable income from U.S. sources of $200,000 and U.S. tax liability before credits of $90,000. What is the amount of the foreign tax credit?
4. John and Joan pay $16,500 of qualified adoption expenses in 2014 to finalize the adoption of a qualified child. Their AGI is $197,000 for 2014. What is their adoption credit for 2014?
5. In connection with the adoption of an eligible child who is a U.S. citizen and who is not a child with special needs, Sean pays $4,000 of qualified adoption expenses in 2013 and $3,000 of qualified adoption expenses in 2014. The adoption is finalized in 2014. There is no phase-out of the adoption credit. What are the adoption credits for both 2013 and 2014, respectively?
a. $0; $7,000
b. $4,000; $1,000
c. $4,000; $3,000
d. $7,000; $0
6. In 2014, Irene, an unmarried individual, pays $6,500 in qualified adoption expenses to an adoption agency for the final adoption of an eligible child who is not a child with special needs. In the same year, the individual’s employer, under a qualified adoption assistance program, pays an additional $4,000 for other qualified adoption expenses to an attorney on behalf of Irene for the adoption of the child. Assuming Irene is not subject to the phase-out, she may exclude, from her personal income, how much of the $4,000 payment made by her employer?
7. If a taxpayer does not have enough tax liability to use all the available adoption credit, the unused portion may be carried forward for how many years?
d. There is no carry forward; for 2014, the credit is not refundable
8. Which of the following is not a tax preference or adjustment item for the individual alternative minimum tax computation?
a. Miscellaneous itemized deductions
b. State income taxes
c. State income tax refunds
d. Private activity bond interest
e. All of the above are adjustments or tax preference items
8. Dana and Larry are married and live in Texas. Dana earns a salary of $45,000 and Larry has $25,000 of rental income from his separate property. If Dana and Larry file separate tax returns, what amount of income must Larry report?
e. None of the above
9. Which of the following conditions need not be satisfied in order for a married tax payer, residing in a community property state, to be taxed only on his or her separate salary?
a. The husband and wife must live apart for the entire year.
b. A minor child must be living with the spouse.
c. The husband and wife must not file a joint income tax return.
d. The husband and wife must not transfer earned income between themselves.
e. All of the above must be satisfied.