Tax final - mega sample questions ch 12 True/False Indicate...

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Unformatted text preview: mega sample questions ch 12 True/False Indicate whether the statement is true or false. ____ 1. Income tax withheld on wages is an example of a refundable credit. ____ 2. A LIFO method is applied to general business credit carryovers, carrybacks, and utilization of credits earned during a particular year. ____ 3. Qualified rehabilitation expenditures include the cost of acquiring the building, but not the cost of acquiring the land. ____ 4. Some (or all) of the tax credit for rehabilitation expenditures will have to be recaptured if the rehabilitated property is disposed of prematurely or if it ceases to be qualifying property. ____ 5. If a taxpayer is required to recapture any tax credit for rehabilitation expenditures, the recapture amount must be added to the adjusted basis of the rehabilitation expenditures. ____ 6. The purpose of the work opportunity tax credit is to encourage employers to hire individuals from specified target groups traditionally subject to high rates of unemployment. ____ 7. Employers are encouraged by the work opportunity tax credit to hire individuals who have been long-term recipients of family assistance welfare benefits. ____ 8. An employers tax deduction for wages is not affected by the work opportunity tax credit. ____ 9. Only certain taxpayers are eligible to take the basic research credit. ____ 10. Qualified research and experimentation expenditures are not only eligible for the 20% tax credit, but also can be expensed in the year incurred. ____ 11. A taxpayer who qualifies for the low-income housing credit claims the credit over a 10-year period. ____ 12. The disabled access credit was enacted to encourage small businesses to make their businesses more accessible to disabled individuals. ____ 13. The disabled access credit is computed at the rate of 50% of all access expenditures incurred by the taxpayer during the year. ____ 14. If the cost of a building constructed and placed into service by an eligible small business in the current year includes the cost of a wheelchair ramp, the cost of the ramp qualifies for the disabled access credit. ____ 15. A small employer incurs $1,800 for consulting fees related to establishing a qualified retirement plan for its 85 employees. As a result, the employer may claim the credit for small employer pension plan startup costs for $900. ____ 16. BlueCo incurs $500,000 during the year to construct a facility that will be used exclusively for the care of its employees pre-school age children during normal working hours. The credit for employer-provided child care available to BlueCo this year is $100,000. ____ 17. Cardinal Company incurs $500,000 during the year to construct a facility that will be used exclusively for the care of its employees pre-school age children during normal working hours. Assuming Cardinal claims the credit for employer-provided child care this year, its basis in the newly constructed facility is $375,000....
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Tax final - mega sample questions ch 12 True/False Indicate...

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