Exam 1: An Introduction to Taxation

In a limited liability partnership,a partner is not liable for his partner's acts of negligence or misconduct.

Jillian,a single individual,earns $230,000 in 2016 through her job as an accounting manager.What is her FICA tax?

Chris,a single taxpayer,had the following income and deductions during 2016: Calculate Chris's tax liability due or refund.

The computer is the primary tool of the tax professional.The tax professional uses the computer for all of the following client services except

The Sixteenth Amendment to the U.S.Constitution permits the passage of a federal income tax law.

Larry and Ally are married and file a joint return.They are considering purchasing a personal residence that will generate two deductions: $10,000 in home mortgage interest and $8,000 in real estate taxes.Their marginal tax rate is 25%.What is the total tax savings if Larry and Ally purchase the residence?

Frederick failed to file his 2016 tax return on a timely basis.In fact,he filed his 2016 income tax return on October 31,2017, (the due date was April 15,2017 and paid the amount due at that time.He failed to make timely extensions.Below are amounts from his 2016 return: Frederick sent a check for $1,637 in payment of his liability.He thinks that he has met all of his financial obligations to the government for 2016.For what additional amounts may Frederick be liable assuming any applicable interest rate is 6%?

The largest source of revenues for the federal government comes from

List the steps in the legislative process for major tax reform.

Which of the following is not one of Adam Smith's canons of taxation?

Limited liability companies may elect to be taxed as corporations.

Gifts made during a taxpayer's lifetime may affect the amount of estate tax paid by the taxpayer's estate.

Alan files his 2016 tax return on April 1,2017,shortly before the April 15 due date.His return contains no misstatements or omissions of income.The statute of limitations for changes to the return expires

Brad and Angie had the following income and deductions during 2016: Calculate Brad and Angie's tax liability due or refund,assuming that they have 2 personal exemptions.They file a joint tax return.

The marginal tax rate is useful in tax planning because it measures the tax effect of a proposed transaction.

The primary liability for payment of the gift tax is imposed upon the donee.

Latashia reports $100,000 of gross income on her 2016 tax return,filed on the April 15,2017 due date.She omits $30,000 of income,but the error was not fraudulent.When does the statute of limitations for examining her tax return expire?

A progressive tax rate structure is one where the rate of tax increases as the tax base increases.

While federal and state income taxes,as well as the federal gift and estate taxes,are generally progressive in nature,property taxes are proportional.

Jose dies in the current year and has a gross estate valued at $8,000,000.During his lifetime (but after 1976)Jose had made taxable gifts of $400,000.The estate incurs funeral and administrative expenses of $100,000 and also pays off Jose's debts which amount to $300,000.Jose bequeaths $500,000 to his wife.What is the amount of Jose's tax base,the amount on which the estate tax is computed?