Posted: October 20th, 2022

Which of the following is an INCORRECT statement about the child and dependent care credit

1Which of the following is an INCORRECT statement about the child and dependent care credit?For a married couple to claim the credit, each must work, be looking for work, or be enrolled as full-time students, or the spouse must be physically or mentally incapable of self-care.Taxpayers may claim the credit for the care of certain disabled adult children who live in the house.Taxpayers may claim the credit for care of a disabled spouse.The credit phases out when a taxpayer’s AGI crosses a certain threshold.2 Taxpayers without a qualifying child must meet additional requirements to claim the EIC. All of the following are additional requirements EXCEPT:The taxpayer must reside in the U.S. more than half the year.The taxpayer cannot be the dependent of another taxpayer.The taxpayer must earn their income as an employee. They cannot be self-employed.The taxpayer must be between the ages of 25 and 65.3 What first triggers the calculation of the additional Child Tax Credit?Due to tax liability limits, the taxpayer did not receive the maximum Child Tax Credit for which they were eligible.More than two children lived with the taxpayer.The taxpayer’s modified AGI was more than 15% over the threshold.The taxpayer’s modified AGI exceeds $11,500 in 2013.4 Which of the following taxpayers is an eligible student for purposes of the tuition and fees deduction?Nancy is taking the H&R Block Income Tax Course.Sheila is taking an HTML class at her local community center.Sarah is enrolled in two Psychology classes at Your State University.Cynthia has a Master’s Degree in Accounting. She is taking a self-defense class at her local community center.6 Which of the following clients is insolvent?Portia, who owns assets with a fair market value of $4,000 and has total liabilities of $5,000.Juan, who owns assets with a fair market value of $10,000, has liabilities of $10,000, and retired last year.Graham, who owns no assets, is unemployed, and has no liabilities.Heather, who owns assets with a fair market value of $7,500 and has no liabilities.7  Income may be recognized from cancellation of debt in which instance below?The debt canceled from the mortgage on a taxpayer’s second home.The debt canceled by a purchase price reduction on the sale of a home.The debt was canceled through a bankruptcy.The debt canceled was intended as a gift.8 For children to be subject to the “kiddie tax” rule, which of the following statements must be true?The child must have more than $2,000 investment income.The child must not have attained age 24 in the tax year.The child must have at least one living parent.All of these must be true.9 For a child to qualify for the “kiddie tax” rule, which statement below is not a true statement?The child must not have attained age 24 in the tax year.The child must have two living parents.The child must have more than $2,000 investment income.The child must have at least one living parent.10 Johnni placed the following items in service during 2013: 1) February 3 – a $2,000 machine (7-year property); 2) June 16 – a $1,500 desk (7-year property); and 3) November 10 – a $5,000 computer system (5-year property). No §179 expense deduction was taken. No bonus depreciation was taken. What is the 2013 depreciation for the machine?$71$286$400$50011 Which property is subject to depreciation?The cars on the lot of an auto dealership.A duplex that was purchased to use as rental property.The fair market value of the land where the duplex sits.A four-wheeler purchased for personal use.12 Which of the following items is included in support for a dependent?Funeral expenses.A manicure.Amounts contributed to savings.A college scholarship.13 What EITC Due Diligence question must you ask if the taxpayer wishes to claim a dependent who is not their son or daughter?Are the dependent’s parents still living?If the dependent’s parents are living, why isn’t the dependent living with the parents?Where are the dependent’s parents living?All of these are required.14 When a bond is sold between interest dates, on whose tax return is the adjustment for accrued interest shown?The seller’s tax return.The buyer’s tax return.Neither the buyer’s nor the seller’s tax return.Both the buyer’s and the seller’s tax return.15 Martha came to you to have her taxes prepared. She is a new client, and you walk her through the process you will use to prepare her return. When she gives you her Forms W-2, she tells you that one has the wrong SSN on it. What do you need to do?Assure her the return can still be completed.Tell Martha she needs to have the employer correct it on their records and notify the Social Security Administration of the error.Have Martha contact her employer and request a new form with the correct SSN.All of these.16 hich of the following best describes rental income reported on Schedule E?Rents received in the ordinary course of a real estate dealer’s business.Rents received only for the use of personal property.Rents received for the casual use of personal property.Rents received for the use of real property and personal property leased with it.17 Income from rental real estate is generally considered to be:Active income.Passive income.Portfolio income.Earned income.18 the IRS may offset (apply) a taxpayer’s refund to which of the following types of debts?Past-due child support.Past-due car payments.Past-due mortgage payments.Past-due credit card accounts.19 Shannon has sponsored, and participated in, a barbecue team for the last ten years. The team enters several contests a year, but has never come close to turning a profit. Shannon has told you she doesn’t really care if the team makes any money, she just enjoys being able to get away from work and unwind at the contests. Which of the following is most accurate?Shannon may deduct all of the expenses associated with the team.Shannon may only deduct her proportional share of the expenses of the team.Shannon may never deduct any of the expenses of the team.This activity is likely a hobby for Shannon, and her deductions may be limited.20 A taxpayer can be exempt from withholding when: A. Taxpayer had no federal tax liability in the preceding year. B. Taxpayer does not expect to have federal tax liability for the current year.B only.Neither A nor B.A and B.A only.21Which statement best describes how you determine the basis of purchased property?The purchase price of the property plus certain costs incurred at the time of purchase.The FMV of similar property.The adjusted basis of the property in the hands of the seller.The lower of FMV or the adjusted basis for the seller.22Which statement about a qualifying child is true?A child who is the qualifying child to one taxpayer may claim his or her own qualifying child.A child may be a qualifying child to multiple taxpayers in the household.A child may be claimed as a qualifying child by multiple taxpayers in the household.A child who is a qualifying child to one taxpayer may be claimed as a qualifying relative by another taxpayer.23Which situation below qualifies a taxpayer to file as head of household?A child not living in the household whose dependency exemption was released to the taxpayer.A dependent brother who lived in the household almost half the year.A dependent girlfriend who lived in the household all year.A dependent nephew who lived in the household more than half the year.24 The insolvency determination is made effective what date?The date the canceled debt was incurred.December 31 of the year before the debt was canceled.Immediately before the debt was canceled.December of the year in which the debt was canceled25 Which one of the following items IS taxable income on the federal return?Scholarship funds used to pay the tuition of a degree candidate.Interest from municipal bonds.Gambling winnings.Life insurance proceeds paid due to the death of the insured.

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