tax quizzes 7-9 - When utilizing the general business...

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When utilizing the general business credit from various carryover years, the most recent credits are used first. Answer: True False The oldest credits are used first in determining the amount of a taxpayer's general business credit for a tax year. Correct Marks for this submission: 1/1. Question 2 Marks: 1 On July 10, 2007, Test Corporation purchased energy equipment for $15,000. The equipment has a 5-year cost recovery period. The corporation took the appropriate investment credit for 2007. On August 15, 2011, the corporation sold the asset for $10,000. What is the amount of investment credit recapture that is due to the IRS? Choose one answer. a. $300 b. $900 c. $1,000 d. $1,500 e. None of the above The asset was held for over four but less than five years; thus, 20% of the investment credit taken must be recaptured. Asset purchase price $15,000 Investment credit rate x 10% Investment credit taken $ 1,500 Investment credit taken $ 1,500 Recapture rate x 20% Investment credit recapture $ 300 Correct Marks for this submission: 1/1. Question 3 Marks: 1 Foreign income taxes paid to a foreign country may be claimed as a credit against United States income tax or deducted as an itemized deduction. Answer:
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True False Incorrect Marks for this submission: 0/1. Question 4 Marks: 1 Which of the following is not a tax preference item for purposes of the alternative minimum tax? Choose one answer. a. Percentage depletion in excess of the adjusted basis in property b. Amortized circulation costs c. Excess intangible drilling costs d. Tax-exempt interest on certain private activity bonds e. All of the above are tax preference items Incorrect Marks for this submission: 0/1. Question 5 Marks: 1 Ron Ryder worked for both Boilerworks and Diemakers during the year. His total wages from Boilerworks were $49,000. His total wages from Diemakers were $20,000. Ron's wife worked for Stenographers during the year and earned total wages of $28,000. What amount can Ron and his wife claim as a credit against their income tax for the year because of excess social security tax withheld if they file a joint return? Choose one answer. a. $290 b. $580 c. $1,240 d. $1,530 e. None of the above The credit for excess social security only applies to an individual having wage income over $94,200. Since neither spouse had wages totalling more than $94,200 there were no excess social security taxes paid. Incorrect Marks for this submission: 0/1. Question 6 Marks: 1 Taxpayers may elect to carry forward unused general business credit for 10 years rather than back one year and forward 20 years. Answer: True False General business credits must be carried back first. Incorrect
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Marks for this submission: 0/1. Question 7
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This note was uploaded on 11/26/2011 for the course INCOME TAX 4404 taught by Professor Bulie during the Spring '11 term at University of Minnesota Duluth.

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tax quizzes 7-9 - When utilizing the general business...

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