1. The tax benefit received from a tax credit is never affected by the tax rate of the taxpayer.
a. True
b. False
2. The tax benefits resulting from tax credits and tax deductions are affected by the tax rate bracket of the taxpayer.
a. True
b. False
3. Nonrefundable credits are those that reduce the taxpayers tax liability but are not paid when the amount of the credit (or credits) exceeds the taxpayers tax liability.
a. True
b. False
4. The credit for child and dependent care expenses is an example of a refundable credit.
a. True
b. False
5. Any unused general business credit must be carried back 3 years and then forward for 20 years.
a. True
b. False
6. A LIFO method is applied to general business credit carryovers, carrybacks, and utilization of credits earned during a particular year.
a. True
b. False
7. The purpose of the tax credit for rehabilitation expenditures is to encourage the relocation of businesses from older, economically distressed areas (i.e., inner city) to newer locations.
a. True
b. False
8. Qualified rehabilitation expenditures include the cost of acquiring the building, but not the cost of acquiring the land.
a. True
b. False
9. The tax credit for rehabilitation expenditures for certified historic structures differs from that for qualifying structures that are not certified historic structures.
a. True
b. False
10.Some (or all) of the tax credit for rehabilitation expenditures will have to be recaptured if the rehabilitated property is disposed of prematurely or if it ceases to be qualifying property.
a. True
b. False
11.If a taxpayer is required to recapture any tax credit for rehabilitation expenditures, the recapture amount need not be added to the adjusted basis of the rehabilitation expenditures.
a. True
b. False
.
12.The purpose of the work opportunity tax credit is to encourage employers to hire individuals from specified target groups traditionally subject to high rates of unemployment.
a. True
b. False
13.Employers are encouraged by the work opportunity tax credit to hire individuals who have been long-term recipients of family assistance welfare benefits.
a. True
b. False
14.The work opportunity tax credit is available only for wages paid to qualifying individuals during their first year of employment.
a. True
b. False
15.An employers tax deduction for wages is affected by the work opportunity tax credit.
a. True
b. False
16.The incremental research activities credit is 20% of the qualified research expenses that exceed the base amount.
a. True
b. False
17.All taxpayers are eligible to take the basic research credit.
a. True
b. False
18.Qualified research and experimentation expenditures are not only eligible for the 20% tax credit, but also can be expensed in the year incurred.
a. True
b. False