26.	Jim purchased one share of X42 Utility Company stock for $100. He received a dividend of $5. It was reported to him on Form 1099-DIV, included in Box 3: Nondividend distributions. Which of the following statements is CORRECT?

A. The dividend is not taxable as dividend income, and the basis of his stock is not $105. B. The dividend is not taxable as dividend income; however, it is reported as capital gain. C. The dividend is not taxable as dividend income, and the basis of his stock is now $95.

27.	Which of the following statements is CORRECT in regard to parents of a qualifying child, where the childs only income is $5,000 in unearned interest and dividends?

A. The parents are not able to claim a Child Credit for their child. B. The parents may claim up to a $500 Other dependent credit for this child. C. The parents may claim up to a $2,000 Child credit for this child.

28.	Which one of the following statements describes credits?

A. Credits generally have the same tax effect as deductions. B. Most credits are nonrefundable. C. Credits are equally applicable to the regular and alternative-minimum-tax regimes.

29.	Which one of the following statements describes the child-care and dependent-care credit?

A. The expenses must be made in order for the taxpayer to look for work. B. The expenses with respect to child care or dependent care that qualify for the credit are limited. C. The expenses must be made on behalf of more than one child or dependent.

30.	Which one of the following statements describes the child tax credit?

A. The amount of the tax credit is $500 per child. B. The amount of the tax credit is phased out at certain levels of adjusted gross income. C. The credit is not refundable.