Q- Corbin had an adjusted gross income in 2014 of $170,000. Other information is
ID: 2497148 • Letter: Q
Question
Q- Corbin had an adjusted gross income in 2014 of $170,000. Other information is as follows:
Standard deduction $6,200
Personal exemption $3,900
Property and local taxes paid $5,000
Business expenses subject to the 2% AGI threshold $10,000
What amount will be added back as an adjustment in the calculation of Corbin’s alternative minimum taxable income?
a. $15,100
b. $21,700
c. $17,800
d. $25,100
Q- Which of the following statements is true regarding the education tax credits?
a. Continuing education expenses do not qualify for either education credit.
b. The American Opportunity credit permits a maximum credit of 20% of qualified
expenses up to $10,000 per year.
c. The American Opportunity credit is calculated per taxpayer, while the lifetime
learning credit is available per eligible student.
d. The lifetime learning credit is available for qualifying tuition and related expenses
incurred by students pursuing only graduate degrees.
e. None of these statements are true.
Q- Which, if any, of the following correctly describes the earned income credit?
a. Would be available regardless of the amount of the taxpayer’s adjusted gross income.
b. Not available to a surviving spouse.
c. Is a refundable credit.
d. A taxpayer must have a qualifying child to take advantage of the credit.
Explanation / Answer
1. The amount that would be added back as an adjustment in the calculation of Corbin’s alternative minimum taxable income is a. $15,100
Standard deduction + Personal exemption + Property and local taxes paid
2. The statement which is true regarding the education tax credits is: c. The American Opportunity credit is calculated per taxpayer, while the lifetime learning credit is available per eligible student.
3. The earned income credit c. Is a refundable credit.
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