Ch 9: Tax Credit Questions And Answers
With Verified Solutions Rated A+
Jim, a married filing jointly taxpayer, paid $5,000 of qualified tuition and related
expenses for each of his twin daughters, Stephanie and Amanda, during 2020.
They started their freshman year of college during 2020. Jim was very excited that
both daughters excelled in the college environment; especially since Stephanie had
a drug addiction during her senior year of high school (Jim had a friend on the
college admissions board that thankfully overlooked Stephanie's felony drug
conviction). Jim also paid $2,000 of qualified tuition and related expenses for his
daughter Linda's sophomore year of college and $3,000 for his own master's
program. Jim claims all three of his daughters as dependents. His modified gross
income for the year is $50,000. What is the available Lifetime Learning Credit
assuming he elects to use the Lifetime Learning Credit for those expenses that do
not qualify for the American Opportunity Tax C - ANSWER✔✔ $1,600
($5,000 + $3,000) x 20%
Sara, who is single, contributed $6,000 to her Roth IRA for 2020. She had MAGI
of $17,000 for 2020 and used the single filing status. She has never taken a
distribution from a retirement plan. What is her maximum retirement savings credit
for 2020? - ANSWER✔✔ $1,000
Her maximum credit for 2020 is $1,000 ($2,000 x 50%).
In 2020, Ginger paid $5,000 for qualified solar electric property and $4,000 for
qualified fuel cell property with one kilowatt of capacity for her vacation home.
She also paid $10,000 for qualified solar water heating property for her personal
residence. What is her maximum residential energy efficient property credit for
2020? - ANSWER✔✔ $3,900
, ($5,000 x 26%) + ($10,000 x 0.26%)
Jim, a married filing jointly taxpayer, paid $10,000 of qualified tuition and related
expenses for each of his twin daughters, Stephanie and Amanda, during 2020.
They started their freshman year of college during 2020. Jim was very excited that
both daughters excelled in the college environment; especially since Stephanie had
a drug addiction during her senior year of high school (Jim had a friend on the
college admissions board that thankfully overlooked Stephanie's felony drug
conviction). Jim also paid $2,000 of qualified tuition and related expenses for his
daughter Linda's sophomore year of college, and $3,000 for his own master's
degree program. Jim claims all three of his daughters as dependents. His modified
gross income for the year is $50,000. What is the available American Opportunity
Tax Credit for 2020? - ANSWER✔✔ $4,500
The credit available for Linda is $2,000 ($2,000 x 100%). Linda would have
needed $4,000 of expenses to get the maximum credit. The total of credits for
Amanda and Linda is $4,500 for 2020.
Which of the following statements concerning refundable tax credits is correct? -
ANSWER✔✔ Refundable tax credits can generate a tax refund.
Which of the following statements concerning the general business credit is
correct? - ANSWER✔✔ The general business credit is a combination of more than
30 different nonrefundable tax credits.
Brandy is a single mom with 2 children, Zach and Wendy. Zach is 14 years old and
Wendy is 3 years old. Brandy has AGI of $50,000. She paid the following
expenses for child care this year:
With Verified Solutions Rated A+
Jim, a married filing jointly taxpayer, paid $5,000 of qualified tuition and related
expenses for each of his twin daughters, Stephanie and Amanda, during 2020.
They started their freshman year of college during 2020. Jim was very excited that
both daughters excelled in the college environment; especially since Stephanie had
a drug addiction during her senior year of high school (Jim had a friend on the
college admissions board that thankfully overlooked Stephanie's felony drug
conviction). Jim also paid $2,000 of qualified tuition and related expenses for his
daughter Linda's sophomore year of college and $3,000 for his own master's
program. Jim claims all three of his daughters as dependents. His modified gross
income for the year is $50,000. What is the available Lifetime Learning Credit
assuming he elects to use the Lifetime Learning Credit for those expenses that do
not qualify for the American Opportunity Tax C - ANSWER✔✔ $1,600
($5,000 + $3,000) x 20%
Sara, who is single, contributed $6,000 to her Roth IRA for 2020. She had MAGI
of $17,000 for 2020 and used the single filing status. She has never taken a
distribution from a retirement plan. What is her maximum retirement savings credit
for 2020? - ANSWER✔✔ $1,000
Her maximum credit for 2020 is $1,000 ($2,000 x 50%).
In 2020, Ginger paid $5,000 for qualified solar electric property and $4,000 for
qualified fuel cell property with one kilowatt of capacity for her vacation home.
She also paid $10,000 for qualified solar water heating property for her personal
residence. What is her maximum residential energy efficient property credit for
2020? - ANSWER✔✔ $3,900
, ($5,000 x 26%) + ($10,000 x 0.26%)
Jim, a married filing jointly taxpayer, paid $10,000 of qualified tuition and related
expenses for each of his twin daughters, Stephanie and Amanda, during 2020.
They started their freshman year of college during 2020. Jim was very excited that
both daughters excelled in the college environment; especially since Stephanie had
a drug addiction during her senior year of high school (Jim had a friend on the
college admissions board that thankfully overlooked Stephanie's felony drug
conviction). Jim also paid $2,000 of qualified tuition and related expenses for his
daughter Linda's sophomore year of college, and $3,000 for his own master's
degree program. Jim claims all three of his daughters as dependents. His modified
gross income for the year is $50,000. What is the available American Opportunity
Tax Credit for 2020? - ANSWER✔✔ $4,500
The credit available for Linda is $2,000 ($2,000 x 100%). Linda would have
needed $4,000 of expenses to get the maximum credit. The total of credits for
Amanda and Linda is $4,500 for 2020.
Which of the following statements concerning refundable tax credits is correct? -
ANSWER✔✔ Refundable tax credits can generate a tax refund.
Which of the following statements concerning the general business credit is
correct? - ANSWER✔✔ The general business credit is a combination of more than
30 different nonrefundable tax credits.
Brandy is a single mom with 2 children, Zach and Wendy. Zach is 14 years old and
Wendy is 3 years old. Brandy has AGI of $50,000. She paid the following
expenses for child care this year:
