Business-Related Tax Credits (Second Edition) (00311722, 2012)

There are an increasing number of tax credits, both for individuals and businesses. This course provides an overview of the various types of new business credits available for 2012 and in the future. Limitations apply for each of these credits. Some credits, for example, are restricted to small businesses. This course covers the definition of a small business as it applies to each of these credits and discusses credits that relate to employment of workers. This course also zeroes in on credits that are business-type or industry-specific, and some other business credits that do not fit into any particular category of credits. Finally, it covers the general business credit—which credits are part of the general business credit and what limitations apply.




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Question 1

Correct
The basic work opportunity credit is:
25 percent of first-year wages up to $6,000, for employees working at least 400 hours
(You Answered) (Correct Answer) 40 percent of first-year wages up to $6,000, for employees working at least 400 hours
40 percent of first-year wages up to $12,000
25 percent of first-year wages up to $12,000, but only for employees working at least 400 hours

Question 2

Correct
All of the following statements about the empowerment zone employment credit are correct except:
(You Answered) (Correct Answer) The credit is not part of the general business credit.
The credit is 20 percent of the first $15,000 of wages for work performed for services within designated areas.
The credit cannot be taken if the employer chooses to take the work opportunity credit.
Only activities in federally-designated areas are eligible.

Question 3

Correct
When determining eligibility for the credit for start-up costs for adopting retirement plans, a small employer is defined as having:
No more than 25 employees
Less than 50 employees
(You Answered) (Correct Answer) No more than 100 employees
Only US citizens or permanent residents as employees

Question 4

Correct
The employer wage credit for employees who are active duty members of the uniformed services
Allows an employer to fully expense wage differentials paid to active duty service members.
Applies to all employers in the United States
(You Answered) (Correct Answer) Is disallowed if the employers fail to comply with the employment or reemployment rights of the service members
Has been made permanent

Question 5

Correct
The energy credit for geothermal energy is what percentage of expenses:
(You Answered) (Correct Answer) 10 percent
30 percent
50 percent
Geothermal energy is not part of the energy credit

Question 6

Correct
If a company receives government funding for research, it can claim the research credit:
Only if it received only state or local funding and no federal funds
Only if it received federal and no state or local funding
(You Answered) (Correct Answer) Regardless of any government funding received
Only if the research is conducted in an empowerment zone

Question 7

Incorrect
An eligible small business installs ramps to make its facility wheelchair accessible. The cost for this work is $6,000. The business is eligible for what amount of disabled access credit?
(Correct Answer) $2,875
(You Answered) $3,000
$4,000
$6,000

Question 8

Correct
Which statement about the new markets credit is not correct?
The credit is five percent of equity investments in qualified community development entities.
The credit can be used to offset the alternative minimum tax.
(You Answered) (Correct Answer) The credit has been made permanent.
The credit is intended to assist those serving low income persons or communities

Question 9

Correct
The carryback/carryover period for the general business credit in 2012 is:
Back one year/forward 15 years
(You Answered) (Correct Answer) Back one year/forward 20 years
Back two years/forward 20 years
Carrybacks or carryovers are not allowed.

Question 10

Correct
Corporations claiming a foreign tax credit claim the credit on:
Form 1116
(You Answered) (Correct Answer) Form 1118
Form 1120-F
Form 3800