CTA Tax Credits and Deductions 3

Question 1

The Research and Development Tax Credit (Section 41) is available to businesses that incur qualified research expenses in what type of activities?

Accepted Answer

Research to develop new or improved business components through technological uncertainty

Answer

The R&D credit applies to qualifying research activities that meet a 4-part test including technological uncertainty and elimination of uncertainty through experimentation.

Question 2

Which of the following is a non-refundable tax credit?

Accepted Answer

Foreign Tax Credit

Answer

The Foreign Tax Credit is non-refundable and can only offset US tax liability, not generate a refund, though excess may be carried forward.

Question 3

The Premium Tax Credit (PTC) assists eligible individuals with purchasing health insurance through:

Accepted Answer

Health insurance marketplaces established under the ACA

Answer

The Premium Tax Credit subsidizes health insurance premiums for eligible individuals and families purchasing coverage through ACA marketplaces.

Question 4

Business meals with clients are deductible at what percentage under current law?

Accepted Answer

50%

Answer

Business meals with clients or for business purposes are generally 50% deductible under IRC Section 274.

Question 5

Qualified education loan interest is deductible up to what maximum amount per year?

Accepted Answer

$2,500

Answer

Taxpayers may deduct up to $2,500 of qualified student loan interest per year, subject to income phase-out limits.

CTA - Certified Tax Advisor Practice Test

CTA - Certified Tax Advisor Practice Test

CTA Tax Credits and Deductions 3