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Brian and Jennifer are a married couple who believe they may
be subject ro the AMT this year. Currently, they calculate their alternative
minimum taxable income (AMTI) ro be $900,000 .
a. What is their AMT exemption amount?
b. They are considering an opportunity that wou ld allow
them to earn additional income this year. As a result of this add itional
income, they believe chat their AMTI will increase by $200,000. What will their
AMT exemption be if they recognize the add itional income?

1.If Congress is considering a tax credit or deduc – tion as
an incentive to encourage certain activities, is a $40 tax credit more valuab
le than a $200 tax deduction for a taxpayer with a 12% marginal rate? A 22%
marginal rare?
2. What are the more significant tax credit items included
in the computation of the genera l business tax credit?

Sarah, a married taxpayer who files a joint return, is
considering a foreign assignment for two years. In 2019, she will earn $120,000
in the foreign country . Sarah has no other income. She will be eligible for
either the foreign tax credit or the foreign-earned income exclusion. The
average tax rare on Sarah’s earnings if fully taxab le under U.S. law would be
24%. The average tax rare for the foreign salary is 20% under the foreign
country’s laws.
a. Discuss in general terms the computation of the foreign
tax credit and its limitation.
b. Would Sara h be better off electing the foreign tax cred
it or the foreign earned income exclusion? Explain.

Queen Corporation has been in business since 1989. During
the preceding year, the company had 25 fullrime employees and gross receipts of
$8,000,000. During the current year, Queen spent $15,000 to install access
ramps for disabled individuals. ls Queen Corporat ion eligible for the disabled
access credit? If so, what is the credit amount and the basis reduction (if
any) for the depreciable property?

Vivian is a single taxpayer with two children who qualify
for the child and dependent care credit . She incurred $7,000 of qualifying
child care expenses during the current year. She also received $4,000 in
reimbursements from her employer from a qualified employee dependent care
assistance program. What is the maximum child and dependent care credit
available to Vivian if her AGI is $24,500?

1.Alice is a single mother, 37 years old, and has tV0
qualifying children, ages 3 and 6. In 2019, she earns $20,000 in wages
resulting in $20,000 of AGL ls Alice eligible for the earned income credit?
2. Why are most elderly people unable to qua lify for the
tax credit for the elderly?

The credit for employer-provided child care has two major
components, a cred it for qualified child care expenses and a credit for qua
lified child care resources and referral expend itures.
a. Discuss each of the two components . What type of
expenses are included in each com-ponent?
b. The two components are combined to compute the credit for
employer-provided child care. Discuss the rates for each component, the
limitation for the credit, and the tax result if the employer ceases ro offer
child care operations within the first three years after claiming the credit.

Vincent anticipates chat his actual tax liability for the
tax year will be $12,000 and that federa l income taxes withheld from his
salary will be $9,000. Thus, when he files his current year income tax return,
he will have a $3,000 balance due. In the previous year, his actua l federal
income tax liability was $8,000 and his AGI was less than $150,000 .
a. ls Vincent required to make estimated tax payments in the
current year? Explain.
b. Will Vincent be subject to an underpayment penalty if his
prior year AGI was $175,000? Why?