Spring 2010 Test II

Spring 2010 Test II - TAX-402 Test II Spring 2010 1. During...

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TAX-402 Spring 2010 Test II 1. During the year, Raven Corporation (a U.S. corporation) has U.S. source income of $4,000,000 and foreign source income of $2,000,000. The foreign source income generates foreign income taxes of $1,000,000. The U.S. income tax before the foreign tax credit is $2,100,000. Raven Corporation's foreign tax credit is: a. $200,000. b. $300,000. c. $700,000. d. $1,050,000. 2. Levi and Virginia are married and file a joint tax return claiming their two children, ages 12 and 9 as dependents. Their AGI for 2007 is $100,000. Levi and Virginia’s child tax credit for 2007 is: a. $0. b. $500. c. $1,500. d. $2,000. 3. Jackson and Betty are married, file a joint tax return, have AGI of $75,000, and have two children. Nannette is beginning her freshman year at State University during Fall 2007, and Gabby is beginning her senior year at Northeast University during Fall 2007 after having completed her junior year during the spring of that year. Both Nannette and Gabby are claimed as dependents on their parents’ tax return. Nannette’s qualifying tuition expenses and fees total $4,500 for the fall semester, while Gabby’s qualifying tuition expenses and fees total $6,250 for each semester during 2007. Full payment is made for the tuition and related expenses for both children during each semester. The HOPE scholarship and lifetime learning credits available to Jackson and Betty for 2007 are: HOPE scholarship credit Lifetime learning credit a. $1,650 $1,250 b. $1,650 $2,000 c. $2,750 $3,125 d. $2,750 $6,250 4. In describing FICA taxes for self-employed taxpayers, which (if any) of the following statements is correct? a. Individuals with net earnings of $500 or more from self-employment are subject to the tax. b. Self-employed taxpayers pay only the employer’s one-half portion of the tax. c. Self-employed taxpayers are allowed an income tax deduction for 50% of the self-employment tax paid. d. Self-employed taxpayers are allowed a deduction from net earnings from self-employment at the full self-employment rate in determining the self- employment tax.
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5. Miriam, who is single and age 36, provides you with the following information from her financial records for 2007. Regular income tax liability
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Spring 2010 Test II - TAX-402 Test II Spring 2010 1. During...

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