Question: 1). How does the earned income credit fit into the federal government`s plan to fight poverty?
2). Discuss the rationale underlying the enactment of the following tax credits.
a. Rehabilitation expenditures credit.
b. Research activities credit.
c. Low-income housing credit.
d. Earned income credit.
e. Foreign tax credit
3). Paul Chaing (4522 Fargo Street, Geneva, IL 60134) acquires a qualifying historic structure for $350,000 (excluding the cost of the land) and plans to substantially rehabilitate the structure. He is planning to spend either $320,000 or $380,000 on rehabilitation expenditures. Write a letter to Paul and a memo for the tax research files explaining the following, for the two alternative expenditures.
a. The computation that determines the rehabilitation expenditures tax credit available.
b. The effect of the credit on Paul`s adjusted basis in the property.
c. The cash-flow differences as a result of the tax consequences related to his expenditure choice.
4) In March 2014, Sparrow Corporation hired three individuals_ Austin, Adam, and Angela_ all of whom are certified as long-term family assistance recipients. Each of these individuals earned $11,000 during 2014. Only Adam continued to work for Sparrow in 2015, and he earned $13,500 then. In March 2015, Sparrow hired Sam, who also is certified as a long-term family assistance recipient. During 2015, Sam earned $12,000.
a. Compute Sparrows work opportunity credit for 2014 and 2015.
b. If Sparrow pays total wages to its employees of $325,000 in 2014 and $342,000 in 2015, what is the entity`s wage deduction for those years
5). Cooper national is incorporated in Alabama. It generated 5 million profit on its overseas operation this year. Cooper paid the following to various other countries.
1 million income taxes
1.5 million in value added taxes.
What coopers alternatives as to the treatment of these tax payments on its US federal income tax return?
6). Bernadette, a longtime client of yours, is an architect and president of the local Rotary chapter. to keep up-to-date with the latest developmnets in her profession, she attends continuing education seminars offered by the architecture school at state university. during 2011, Bernadette spends $2000 on course tuition to attend such seminars. she also spend another $400 on architecture books during the year. Bernadette''s son is a senior majoring in engineering at the university of the Midwest.
During the 2011 calendar year, Bernadette''s son incurs the following expenses: $8200 for tution (4100 per semester) and $750 for books and course materials, Bernadette''s son, whom she claims as a dependant, lives at home while attending school full-time. Bernadette is married, files a joint return, and has a combined AGI with her husband of $110,000.
a. Calculate Bernadettes education tax credit.
b. In her capacity as president of the local Rotary chapter, Bernadette has asked you to present a 20-30 minute speech outlining the different ways the tax law helps defray (1) the cost of higher education and (2) the cost of continuing education once someone is in the workfoce. Prepare an outline of possible topics for presentation. A tentative title for your presentation is "How Can the Tax Law Help Pay for College and Continuing Professional Education?"