Test Bank For Income Tax Fundamentals 2016 34th Edition
Test Bank For Income Tax Fundamentals 2016 34th Edition provides comprehensive coverage of tax laws and regulations. The Test Bank helps readers learn and understand the tax code, as well as how to prepare accurate tax returns.In addition, the Test Bank includes practice questions and answers to help reader Test their knowledge of the material. The Test Bank For Income Tax Fundamentals 2016 34th Edition is an essential resource for anyone who needs to master the tax code.
Test Bank For Income Tax Fundamentals 2016 34th Edition
Chapter 6 — Credits and Special Taxes
1. What would reduce income taxes more: a $100 tax credit or a $100 tax deduction?
ANSWER: Tax credits reduce taxes more than deductions since credits are subtracted directly from the income tax. Deductions are subtracted from income before the income tax is calculated and therefore reduce taxes only by the tax rate (percentage) in effect.
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Essay
HAS VARIABLES: False
LEARNING OBJECTIVES: ITF.WABG.16.LO:6-01 – LO:6-01
NATIONAL STANDARDS: United States – BUSPROG: Analytic
STATE STANDARDS: United States – AK – AICPA: FN-Reporting
KEYWORDS: Bloom’s: Comprehension
2. The child tax credit is not available for children ages 17 and older.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: ITF.WABG.16.LO:6-01 – LO:6-01
NATIONAL STANDARDS: United States – BUSPROG: Analytic
STATE STANDARDS: United States – AK – AICPA: FN-Reporting
KEYWORDS: Bloom’s: Knowledge
3. The child tax credit is $1,000 per qualifying child unless it is phased out due to higher levels of parental income.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: ITF.WABG.16.LO:6-01 – LO:6-01
NATIONAL STANDARDS: United States – BUSPROG: Analytic
STATE STANDARDS: United States – AK – AICPA: FN-Reporting
KEYWORDS: Bloom’s: Knowledge
4. Denice is divorced and files a single tax return claiming her two children, ages 7 and 9, as dependents. Her AGI for 2015 is $81,500. Denice’s child tax credit for 2015 is:
a. $0
b. $350
c. $1,000
d. $1,650
e. $2,000
ANSWER: d
RATIONALE: (2 × $1,000) – [($81,500 – $75,000) / $1,000 rounded up to the nearest whole number × $50]
POINTS: 1
DIFFICULTY: Moderate
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: ITF.WABG.16.LO:6-01 – LO:6-01
NATIONAL STANDARDS: United States – BUSPROG: Analytic
STATE STANDARDS: United States – AK – AICPA: FN-Reporting
KEYWORDS: Bloom’s: Comprehension
5. Curly and Rita are married, file a joint return, and have two dependent children, ages 11 and 13. Their AGI is $117,000. By how much is their child credit reduced in 2015?
a. $0
b. $300
c. $350
d. $700
e. $7,000
ANSWER: c
RATIONALE: ($117,000 – $110,000) / $1,000 rounded up to the nearest whole number × $50
POINTS: 1
DIFFICULTY: Challlenging
QUESTION TYPE: Multiple Choice
HAS VARIABLES: False
LEARNING OBJECTIVES: ITF.WABG.16.LO:6-01 – LO:6-01
NATIONAL STANDARDS: United States – BUSPROG: Analytic
STATE STANDARDS: United States – AK – AICPA: FN-Reporting
KEYWORDS: Bloom’s: Comprehension
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