An Individual Taxpayer Who Is Self-Employed and an Active Investor

question 86

Multiple Choice

An individual taxpayer who is self-employed and an active investor has qualified for foreign tax credits,nonrefundable personal tax credits and general business credits.Because he knows there are differing limitations on the application of these credits,with resulting interrelated aspects,he wants to know the appropriate order for their application.The appropriate order of the application of these three classes of tax credits is as follows

• A)(1)foreign tax credits; (2)general business credits; (3)nonrefundable personal tax credits.
• B)(1)general business credits; (2)foreign tax credits; (3)nonrefundable personal tax credits.
• C)(1)foreign tax credits; (2)nonrefundable personal tax credits; (3)general business credits.
• D)(1)nonrefundable personal tax credits; (2)foreign tax credits; (3)general business credits.

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Definitions:

Mismatch

This occurs when there is a lack of alignment or compatibility between two or more things or elements.

Tolerance

The willingness to accept or endure beliefs, behaviors, or practices different from one's own.

Needs

Basic or essential requirements that individuals or systems must have fulfilled to maintain function or achieve goals.

Theory of Work Adjustment

A theory explaining the relationship between individuals and their work environments, focusing on the compatibility between individual needs and skills and job demands and rewards.