Chapter 10 T/F

Question 1

A “qualifying child” for purposes of the tax credit for children must be under the age of 19 at the end of the tax year.

Answer 1

False. The child must be under age 17, not age 19.

Question 2

The amount of the tax credit for children (without regard to phaseout rules) is currently $1,000.

Answer 2

True

Question 3

“Qualified adoption expenses” for purposes of the adoption tax credit do not include costs associated with the adoption of a child of the taxpayer’s spouse.

Answer 3

True

Question 4

The adoption credit must be claimed for the tax year following the year in which the expenses are paid, unless the adoption becomes final during or before the year the expenses are paid.

Answer 4

True

Question 5

A dependent-care credit is allowed for “eligible expenses” for the care of a “qualifying individual.”

Answer 5

True

Question 6

The dependent-care credit is the same whether the working spouse has one or more children.

Answer 6

False. Taxpayers may receive an additional credit for a second child, but not for more than two children.

Question 7

Currently, the American opportunity tax credit may be claimed in amounts up to $3,000 per student per year.

Answer 7

False. The credit may currently be claimed in an amount not exceeding $2,500, per student on an annual basis.

Question 8

Both the Hope/American Opportunity Credit and lifetime education credits are subject to phaseout rules for taxpayers with modified adjusted gross income in excess of certain levels.

Answer 8

True