Question 1

Which of the following is a type of wealth tax?

Accepted Answer

A) A tax on a person's salary 
B) A tax on stocks owned by the taxpayer 
C) A tax on purchases made at a department store 
D) A tax on property given to a grandchild 
A) A tax on a person's salary 
B) A tax on stocks owned by the taxpayer 
C) A tax on purchases made at a department store 
D) A tax on property given to a grandchild

Question 2

What is the earliest year to which a corporation can carry a net operating loss realized in 2015?

Accepted Answer

A) 2014 
B) 2013 
C) 2012 
D) 2011 
A) 2014 
B) 2013 
C) 2012 
D) 2011

Question 3

Daniel is a single with taxable income of $40,000.What is his marginal tax rate?

Accepted Answer

A) 10% 
B) 15% 
C) 25% 
D) 28% 
A) 10% 
B) 15% 
C) 25% 
D) 28%

Question 4

Which of the following best describes vertical equity?

Accepted Answer

A) All taxpayers should pay some taxes on their incomes 
B) As income increases,taxes should increase 
C) Persons with equal incomes should pay the same amount of taxes 
D) A person with capital gains should pay less tax than a person with the same amount of salary income 
A) All taxpayers should pay some taxes on their incomes 
B) As income increases,taxes should increase 
C) Persons with equal incomes should pay the same amount of taxes 
D) A person with capital gains should pay less tax than a person with the same amount of salary income

Question 5

Jordan is the sole proprietor of Adams Company that reported net income of $57,000 for the year.During the year he withdrew $11,000 from the business for personal use.Jordan is in the 25% marginal tax bracket.How much income from the above must Jordan include in his taxable income for the year?

Accepted Answer

A) $68,000 
B) $57,000 
C) $14,250 
D) $11,000 
A) $68,000 
B) $57,000 
C) $14,250 
D) $11,000

Question 6

Which of the following statements describes the correct relationship between marginal and average tax rates in a progressive tax system?

Accepted Answer

A) The marginal tax rate is higher than the average tax rate. 
B) The average tax rate is higher than the marginal tax rate. 
C) The marginal and average tax rates are the same. 
D) The average tax rate will always be half of the marginal tax rate. 
A) The marginal tax rate is higher than the average tax rate. 
B) The average tax rate is higher than the marginal tax rate. 
C) The marginal and average tax rates are the same. 
D) The average tax rate will always be half of the marginal tax rate.

Question 7

A married person filing a separate return has the lowest standard deduction amount.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is an objective of taxation?

Accepted Answer

A) Raise revenue 
B) Foster social goals 
C) Stimulate the economy 
D) All of the above 
E) None of the above 
A) Raise revenue 
B) Foster social goals 
C) Stimulate the economy 
D) All of the above 
E) None of the above

Question 9

By what right does the U.S.levy an income tax on individuals?

Accepted Answer

A) The 13th Amendment to the Constitution 
B) Public Law 1913 
C) The 16th Amendment to the Constitution 
D) An Act of Congress ratified by the states 
A) The 13th Amendment to the Constitution 
B) Public Law 1913 
C) The 16th Amendment to the Constitution 
D) An Act of Congress ratified by the states

Question 10

10 A taxpayer's filing status determines the basic standard deduction allowed.

Accepted Answer

A) True 
 B)False

Question 11

The lowest tax rate on the tax rate schedules for taxable incomes is the same for individuals and C corporations.

Accepted Answer

A) True 
 B)False

Question 12

The 16th Amendment to the US Constitution that provided for an income tax was ratified in 1913.

Accepted Answer

A) True 
 B)False

Question 13

What is the gain or loss on the sale of an asset for $68,000 if the asset cost $185,000,depreciation expense deducted was $124,000,and there was a $19,000 major addition to the asset?

Accepted Answer

A) $0 
B) $12,000 loss 
C) $7,000 gain 
D) $117,000 loss 
A) $0 
B) $12,000 loss 
C) $7,000 gain 
D) $117,000 loss

Question 14

Which of the following is not a tax credit allowed a corporation?

Accepted Answer

A) Foreign tax credit 
B) Education credit 
C) Investment tax credit 
D) Alternative minimum tax credit 
A) Foreign tax credit 
B) Education credit 
C) Investment tax credit 
D) Alternative minimum tax credit

Question 15

Deazia is the sole proprietor of Baldwin Company that reported net income of $44,000 for the year.During the year she withdrew $20,000 from the business for personal use.How much income from the above must Deazia include in her taxable income for the year?

Accepted Answer

A) $20,000 
B) $24,000 
C) $44,000 
D) $64,000 
A) $20,000 
B) $24,000 
C) $44,000 
D) $64,000

Question 16

How much income tax must the Benton Trust pay in 2015 if its taxable income (after all deductions)is $4,600?

Accepted Answer

A) $460 
B) $690 
C) $900 
D) $1,240 
A) $460 
B) $690 
C) $900 
D) $1,240

Question 17

Elena owns 40% of Martinez,Inc.,a regular C corporation,that reported net income of $80,000 for the year.During the year $8,000 was distributed to Elena from the corporation.How much income from the corporation should Elena include in her taxable income for the year?

Accepted Answer

A) $40,000 
B) $32,000 
C) $8,000 
D) $3,200 
A) $40,000 
B) $32,000 
C) $8,000 
D) $3,200

Question 18

Alexander received $80,000 in salary in 2015.What is his FICA tax if the Medicare rate is 1.45%,the Social Security rate is 6.2% on the 2015 maximum of $118,500,and the FUTA rate is 6% on a $7,000 maximum?

Accepted Answer

A) $4,960 
B) $6,120 
C) $6,540 
D) $10,920 
A) $4,960 
B) $6,120 
C) $6,540 
D) $10,920

Question 19

Emily is a 20% shareholder in an S corporation.Emily acquired her interest on January 1 of the current year by investing $10,000 for 20% of the corporation's stock.In March,the corporation took out a bank loan for $100,000.The corporation reported a net loss for the current year of $200,000.How much of this loss can Emily deduct on her current year's tax return?

Accepted Answer

A) $40,000 
B) $30,000 
C) $20,000 
D) $10,000 
A) $40,000 
B) $30,000 
C) $20,000 
D) $10,000

Question 20

Chloe and Bill plan to marry either immediately before or immediately after year-end.Chloe's taxable income for 2015 is $89,000 and Bill's is $86,000 before their exemptions and deductions.Neither has any dependents nor itemized deductions.Would they have a marriage penalty or a marriage benefit if they married at the end of 2015?

Accepted Answer

Marriage penalty As single taxpayers: Ch

Which of the following is a type of wealth tax?

What is the earliest year to which a corporation can carry a net operating loss realized in 2015?

Daniel is a single with taxable income of $40,000.What is his marginal tax rate?

Which of the following best describes vertical equity?

Jordan is the sole proprietor of Adams Company that reported net income of $57,000 for the year.During the year he withdrew $11,000 from the business for personal use.Jordan is in the 25% marginal tax bracket.How much income from the above must Jordan include in his taxable income for the year?

Which of the following statements describes the correct relationship between marginal and average tax rates in a progressive tax system?

A married person filing a separate return has the lowest standard deduction amount.

Which of the following is an objective of taxation?

By what right does the U.S.levy an income tax on individuals?

10 A taxpayer's filing status determines the basic standard deduction allowed.

The lowest tax rate on the tax rate schedules for taxable incomes is the same for individuals and C corporations.

The 16^th Amendment to the US Constitution that provided for an income tax was ratified in 1913.

What is the gain or loss on the sale of an asset for $68,000 if the asset cost $185,000,depreciation expense deducted was $124,000,and there was a $19,000 major addition to the asset?

Which of the following is not a tax credit allowed a corporation?

Deazia is the sole proprietor of Baldwin Company that reported net income of $44,000 for the year.During the year she withdrew $20,000 from the business for personal use.How much income from the above must Deazia include in her taxable income for the year?

How much income tax must the Benton Trust pay in 2015 if its taxable income (after all deductions)is $4,600?

Elena owns 40% of Martinez,Inc.,a regular C corporation,that reported net income of $80,000 for the year.During the year $8,000 was distributed to Elena from the corporation.How much income from the corporation should Elena include in her taxable income for the year?

Alexander received $80,000 in salary in 2015.What is his FICA tax if the Medicare rate is 1.45%,the Social Security rate is 6.2% on the 2015 maximum of $118,500,and the FUTA rate is 6% on a $7,000 maximum?

The Tax Practice Environment

Determining Gross Income

Employee Compensation

Business Expenses

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Tax-Deferred Exchanges

Taxation of Corporations

Sole Proprietorships and Flow-Through Entities

Income Taxation of Individuals

Wealth Transfer Taxes

Filters

Exam 1: Introduction to Taxation

Which of the following is a type of wealth tax?

What is the earliest year to which a corporation can carry a net operating loss realized in 2015?

Daniel is a single with taxable income of $40,000.What is his marginal tax rate?

Which of the following best describes vertical equity?

Jordan is the sole proprietor of Adams Company that reported net income of $57,000 for the year.During the year he withdrew $11,000 from the business for personal use.Jordan is in the 25% marginal tax bracket.How much income from the above must Jordan include in his taxable income for the year?

Which of the following statements describes the correct relationship between marginal and average tax rates in a progressive tax system?

A married person filing a separate return has the lowest standard deduction amount.

Which of the following is an objective of taxation?

By what right does the U.S.levy an income tax on individuals?

10 A taxpayer's filing status determines the basic standard deduction allowed.

The lowest tax rate on the tax rate schedules for taxable incomes is the same for individuals and C corporations.

The 16th Amendment to the US Constitution that provided for an income tax was ratified in 1913.

What is the gain or loss on the sale of an asset for $68,000 if the asset cost $185,000,depreciation expense deducted was $124,000,and there was a $19,000 major addition to the asset?

Which of the following is not a tax credit allowed a corporation?

Deazia is the sole proprietor of Baldwin Company that reported net income of $44,000 for the year.During the year she withdrew $20,000 from the business for personal use.How much income from the above must Deazia include in her taxable income for the year?

How much income tax must the Benton Trust pay in 2015 if its taxable income (after all deductions)is $4,600?

Elena owns 40% of Martinez,Inc.,a regular C corporation,that reported net income of $80,000 for the year.During the year $8,000 was distributed to Elena from the corporation.How much income from the corporation should Elena include in her taxable income for the year?

Alexander received $80,000 in salary in 2015.What is his FICA tax if the Medicare rate is 1.45%,the Social Security rate is 6.2% on the 2015 maximum of $118,500,and the FUTA rate is 6% on a $7,000 maximum?

The Tax Practice Environment

Determining Gross Income

Employee Compensation

Business Expenses

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Tax-Deferred Exchanges

Taxation of Corporations

Sole Proprietorships and Flow-Through Entities

Income Taxation of Individuals

Wealth Transfer Taxes

Filters

The 16^th Amendment to the US Constitution that provided for an income tax was ratified in 1913.