Question

Dr. Lubna is a cash basis taxpayer. Normally, her patients pay her fee on the day they see her in the office. For some customers, her office processes a medical reimbursementclaim and bills the insurance company for the visit. In 2019, her records reveal the following:

Cash received at time of office visit                          $70,000

Collections on insurance receivables                        88,000

Total accounts receivable, January 1, 2019              5,000

Total accounts receivable, December 31, 2019        15,000

All of the receivables outstanding at the beginning of the year were collected during the year. What amount should Dr. Lubna report as her income for 2019?

	A.	$173,000.
	B.	some other amount.
	C.	$70,000.
	D.	$158,000.
	E.	$168,000.

Hala and Farid have five children ages 10, 13, 15, 21, and 24. Hala works for retail companyand earned $135,000 in 2019.

The 21 years old child works 30 hours per week and is a part-time student at the local community college earning $3,400 in 2019.

If Hala and Farid’s AGI in 2019 is $380,000, the maximum refundable child tax credit Hala and Farid can receive in 2019?

Answer 1

1) Answer : Option E: $ 1,68,000

Cash received at time of office visit $70,000

Add: Collections on insurance receivables                        88,000

Less:Total accounts receivable, January 1, 2019 (5,000)

Add: Total accounts receivable, December 31, 2019        15,000

2) The maximum amount per qualifying child is $2,000. This credit starts to phase out at $200,000 modified adjusted gross income or $400,000 for married couples filing jointly. If your child tax credit is more than the amount of federal income tax you owe, you may be eligible for the additional child tax credit.