Exam 1: An Introduction to Taxation

When returns are processed,they are scored to determine their potential for yielding additional tax revenues.This program is called

What is an important aspect of a limited liability partnership?

Jeffery died in 2016 leaving a $16,000,000 gross estate.Six months after his death,the gross assets are valued at $16,100,000.In years prior to 2016 (but after 1976),Jeffery had made taxable gifts of $300,000.Of the $16,000,000 gross estate,estate assets valued at $3 million were transferred to his wife and $100,000 was used to pay administrative and funeral expenses.Jeffery had debts of $200,000,and the remainder of the estate was transferred to his children. a.What is the amount of Jeffery's taxable estate? b.What is the tax base for computing Jeffery's estate? c.What is the amount of estate tax owed if the unified credit is $2,117,800? d.Alternatively,if six months after his death,the gross assets in Jeffery's estate declined in value to $15,000,000,can the administrator of Jeffery's estate elect the alternate valuation date?

Denzel earns $130,000 in 2016 through his job as a sales manager.What is his FICA tax?

Generally,tax legislation is introduced first in the Senate and referred to the Senate Finance Committee.

Which of the following is not a taxpaying entity?

All states impose a state income tax which is generally based on an individual's federal adjusted gross income (AGI)with minor adjustments.

What are the correct monthly rates for calculating failure to file and failure to pay penalties?

The term "tax law" includes

In 2016,an estate is not taxable unless the sum of the taxable estate and taxable gifts made after 1976 exceeds

Which is not a component of tax practice?

Firefly Corporation is a C corporation.Freya owns all of the stock.During the current year Firefly earned taxable income of $500,000 and paid a $300,000 dividend to Freya.Which of the following statements is correct?

Property transferred to the decedent's spouse is exempt from the estate tax because of the estate tax marital deduction provision.

For gift tax purposes,a $14,000 annual exclusion per donee is permitted.

Until about 100 years ago,attempts to impose a federal income tax were ruled unconstitutional.The amendment to the U.S.Constitution allowing the imposition of a federal income tax is the

Doug and Frank form a partnership,D and F Advertising,each contributing $50,000 to start the business.During the first year of operations,D and F earns $80,000,which is allocated $40,000 each to Doug and Frank.At the beginning of the second year,Doug sells his interest to Marcus for $90,000.What is the amount of Doug's taxable gain on the sale?

During the current tax year,Charlie Corporation generated gross income of $1,800,000 and had ordinary and necessary deductions of $1,300,000,resulting in taxable income of $500,000.If Charlie Corporation paid qualifying dividends of $200,000 to shareholders,all of whom are in the 25% marginal tax bracket,what is the total tax paid on both corporate income and the corporate dividends?

Mia is self-employed as a consultant.During 2016,Mia earned $180,000 in self-employment income.What is Mia's self-employment tax?

A proportional tax rate is one where the rate of the tax is the same for all taxpayers,regardless of income levels.

The primary objective of the federal income tax law is to achieve various economic and social policy objectives.