Question

edira sudesntrecives a scholarship that is excluded from gros income, that amount should reduce qualified expenses. D) Payments made using borrowed funds are not considered qualified expenses. 17) Warren and Erika paid $9,300 in qualified expenses for their son, Cash, to attend the University of Washington. Cash is in his first year of college and attended full-time. How much is Warren and Erika's American opportunity tax credit, without regard to any AGI limitation? A) S0. B) S1,800 C) $2,500. D) $9,300. 18) Gina has $39,000 total taxable income, which includes $6,000 of taxable income from Argentina. She paid $1,200 in foreign income taxes and he foreign tax credit is: (Do not round interim calculations) A) SO. B) $450. C) $555. D) $1,200. 19) Which of the following conditions must be met for a taxpayer to be able to claim the foreign tax credit without filing Form 1116? A) All of the foreign-source income is passive income, B) Total foreign taxes paid were less than $300 ($600 if married filing jointly). C) Taxpayer is not subject to foreign tax limitation rules. D) All of these must be met. 20) Tina has $93,000 total taxable income, which includes $18,000 of taxable income from Japan. She paid $2,200 in foreign income taxes and her U.S. tax liability is $19,610. Tina's foreign tax credit is: (Do not round interim calculations) A) SO. B) $2,200. C) $3,795. D) $18,000 21) Max paid $2,500 in foreign income taxes to Peru. His total income was $65,000, whiclh included $9,000 of foreign income. His U.S. tax liability is $17,750. How much can Max claim as foreign tax credit? (Do not round interim calculations.) A) $2,458. B) $2,500. C) $3,350. D) $9,000. 22) In which of the following situations would a taxpayer be better off to take the foreign taxes

Answer 1

17. D. ($9300)

Assuming he is under the age of 24. A child who is a full time student can generally be claimed as a qualifying child until the year he turns 24.

18. C. ($555)

Foreign tax credit = ($6000 / $39000) * $3610 = $555

19. D (All of these must be met)

Conditions to claim foreign tax credit without filling form 1116 are

• All of the gross foreign source income is from interest and dividends and all of that income and foreign taxes paid on it were reported on Form 1099-INT , Form 1099-DIV or Schedule K-1.
• If you have dividend income from shares of stock you must have held those shares for at least 16 days
• Total foreign taxes paid is not more than $300($600 in case married filled jointly)
• Tax payer is not subject to foreign tax limitation rules.
• All of your foreign taxes are legally owed and not eligible for refund and paid to countries recognized.

20. B. ($2200)

Foreign tax credit = ($18000 / $93000) * $19610 = $3795.484

As she paid $2200,the credit is limited to $2200

21. A ($2458)

Foreign tax credit = ($9000 / $65000) * $17750 = $2457.69