ENROLLED AGENT PART 1 COMPREHENSIVE
EXAMS ACTUAL QUESTIONS AND ANSWERS SURE
A+
✔✔What are examples of tax preference items? - ✔✔Qualified small business stock,
private activity bonds, percentage depletion, intangible drilling costs
✔✔What are examples of adjustment items for AMT? - ✔✔Installment sales, Long Term
Contracts, Pollution Control Facilities, Mining exploration and development, Net
Operating Loss Adjustments, Distributions from Estate or Trust, Research and
Experimental Expenditures, Standard Deduction, Certain Itemized Deductions --state
foreign local tax, investment expense exceeding net income, tax exempt interest on
private activity bonds--circulation expenditures, incentive stock options,
✔✔Foreign Tax Credit Formula and Limits - ✔✔US Income Tax * (Foreign Source
Taxable Inc)/(Worldwide Taxable Inc) = FTC. Limit applied separately to nonbusiness
interest income and all other income. Credit limited to $10,000 for nonbusiness interest
income.
✔✔Requirements for Child and Dependent Care Credit - ✔✔a. Employment. Child care
expenses enable taxpayer to be employed/seek employment.
, b. Household Cost. Taxpayer must provide more than half the cost of household for
dependent under age 13 or handicapped spouse or dependent. Dependent must live
with taxpayer 1/2 year.
Total expenses cannot exceed taxpayer's income --for married taxpayers, income
limitation is smaller of two (if one is a student income is considered to be
$250/$500/month for 1/2 qualifying individuals.
Limited to $3000/1 dependent or $6000/2 or more. Credit is 35% of expenses reduced
by 1% for each $2000 (or part thereof) by which AGI exceeds $15,000. Taxpayers with
AGI over $43,000 will have a credit of 20%
✔✔American Opportunity Credit - ✔✔$2500/student for first 4 years of postsecondary
education. 100% of first $2000 qualified expenses and 25% of the next $2000 of
qualified expenses
Phases out between $80,000 and $90,000 for singles and between $160,000 and
$180,000 on a joint return.
Up to 40% of the credit is refundable.
✔✔Lifetime Learning Credit - ✔✔Max credit $2000/year based on 20% of up to $10,000
of qualified tuition and fees.
Phases out between $57,000 and $67,000 for single filers and between $114,000 and
$134,000 for those filing a joint return
✔✔Child Tax Credit Amounts - ✔✔$2000 2018 to 2025. Additional Child Tax Credit is
for individuals who get less than the full amount of CTC. The ACTC may give the
taxpayer a refund even if the taxpayer does not owe any tax. ACTC is refundable up to
15% of earned income in excess of $2500. Capped at $1400. Schedule 8812.
Phased out when AGI reaches $400,000 for MFJ or $200,000 all others. Credit is
reduced by $50 for each $1000 (or part thereof) by which AGI exceeds threshold.
There is also a $500 nonrefundable credit for dependents other than a qualifying child
or for qualifying child without required SSN.
✔✔Child Tax Credit --Qualifying Child - ✔✔a. taxpayer's son, daughter, stepchild, foster
child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of
any of them.
b. under age 17 at the end of 2018.
c. did not provide over half of his or her own support for 2018
EXAMS ACTUAL QUESTIONS AND ANSWERS SURE
A+
✔✔What are examples of tax preference items? - ✔✔Qualified small business stock,
private activity bonds, percentage depletion, intangible drilling costs
✔✔What are examples of adjustment items for AMT? - ✔✔Installment sales, Long Term
Contracts, Pollution Control Facilities, Mining exploration and development, Net
Operating Loss Adjustments, Distributions from Estate or Trust, Research and
Experimental Expenditures, Standard Deduction, Certain Itemized Deductions --state
foreign local tax, investment expense exceeding net income, tax exempt interest on
private activity bonds--circulation expenditures, incentive stock options,
✔✔Foreign Tax Credit Formula and Limits - ✔✔US Income Tax * (Foreign Source
Taxable Inc)/(Worldwide Taxable Inc) = FTC. Limit applied separately to nonbusiness
interest income and all other income. Credit limited to $10,000 for nonbusiness interest
income.
✔✔Requirements for Child and Dependent Care Credit - ✔✔a. Employment. Child care
expenses enable taxpayer to be employed/seek employment.
, b. Household Cost. Taxpayer must provide more than half the cost of household for
dependent under age 13 or handicapped spouse or dependent. Dependent must live
with taxpayer 1/2 year.
Total expenses cannot exceed taxpayer's income --for married taxpayers, income
limitation is smaller of two (if one is a student income is considered to be
$250/$500/month for 1/2 qualifying individuals.
Limited to $3000/1 dependent or $6000/2 or more. Credit is 35% of expenses reduced
by 1% for each $2000 (or part thereof) by which AGI exceeds $15,000. Taxpayers with
AGI over $43,000 will have a credit of 20%
✔✔American Opportunity Credit - ✔✔$2500/student for first 4 years of postsecondary
education. 100% of first $2000 qualified expenses and 25% of the next $2000 of
qualified expenses
Phases out between $80,000 and $90,000 for singles and between $160,000 and
$180,000 on a joint return.
Up to 40% of the credit is refundable.
✔✔Lifetime Learning Credit - ✔✔Max credit $2000/year based on 20% of up to $10,000
of qualified tuition and fees.
Phases out between $57,000 and $67,000 for single filers and between $114,000 and
$134,000 for those filing a joint return
✔✔Child Tax Credit Amounts - ✔✔$2000 2018 to 2025. Additional Child Tax Credit is
for individuals who get less than the full amount of CTC. The ACTC may give the
taxpayer a refund even if the taxpayer does not owe any tax. ACTC is refundable up to
15% of earned income in excess of $2500. Capped at $1400. Schedule 8812.
Phased out when AGI reaches $400,000 for MFJ or $200,000 all others. Credit is
reduced by $50 for each $1000 (or part thereof) by which AGI exceeds threshold.
There is also a $500 nonrefundable credit for dependents other than a qualifying child
or for qualifying child without required SSN.
✔✔Child Tax Credit --Qualifying Child - ✔✔a. taxpayer's son, daughter, stepchild, foster
child, brother, sister, stepbrother, stepsister, half brother, half sister, or a descendant of
any of them.
b. under age 17 at the end of 2018.
c. did not provide over half of his or her own support for 2018
