Trudy Is Jocelyn's Friend

question 25

Multiple Choice

Trudy is Jocelyn's friend. Trudy looks after Jocelyn's four-year-old son during the day so Jocelyn can go to work. During the year, Jocelyn paid Trudy $4,000 to care for her son. What is the amount of Jocelyn's child and dependent care credit if her AGI for the year was $30,000? (Exhibit 8-9 in the text)

• A) $3,000
• B) $0
• C) $1,080
• D) $810

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Definitions:

Partnership

A legitimate business structure involving two or more people who jointly manage and benefit from the profits.

Generally Accepted Accounting Principles

A set of accounting standards and practices that are used in the preparation of financial statements in the United States.

Procedures

The official or established way of doing something, often detailed through a series of steps or actions to be taken.

Guidelines

General rules, principles, or pieces of advice that suggest how something should be done or what something should be.