Question 1

Describe the nondeductible penalties imposed upon taxpayers for failure to comply.

Accepted Answer

a.A penalty of 5% per month subject to a

Question 2

Describe the types of audits that the IRS conducts.

Accepted Answer

In an office audit,the taxpayer goes to

Question 3

Kate files her tax return 36 days after the due date.When she files the return,she sends a check for $2,000 which is the balance of the tax owed by her.Kate's penalty for failure to file a return will be

Accepted Answer

A) 0)5% per month (or factor thereof)up to a maximum of 25%. 
B) 5% per month (or factor thereof)up to a maximum of 25%. 
C) 20% per month (or factor thereof). 
D) 25%. 
A) 0)5% per month (or factor thereof)up to a maximum of 25%. 
B) 5% per month (or factor thereof)up to a maximum of 25%. 
C) 20% per month (or factor thereof). 
D) 25%.

Question 4

Which of the following is not an advantage of a limited liability company (LLC)?

Accepted Answer

A) limited liability for all members of a LLC 
B) ability to choose between taxation as a partnership or corporation 
C) default tax treatment as a corporation,unless otherwise elected 
D) All of the above are advantages of an LLC. 
A) limited liability for all members of a LLC 
B) ability to choose between taxation as a partnership or corporation 
C) default tax treatment as a corporation,unless otherwise elected 
D) All of the above are advantages of an LLC.

Question 5

Which of the following is not a social objective of the tax law?

Accepted Answer

A) prohibition of a deduction for illegal bribes,fines and penalties 
B) a deduction for charitable contributions 
C) an exclusion for interest earned by large businesses 
D) creation of tax-favored pension plans 
A) prohibition of a deduction for illegal bribes,fines and penalties 
B) a deduction for charitable contributions 
C) an exclusion for interest earned by large businesses 
D) creation of tax-favored pension plans

Question 6

The unified transfer tax system

Accepted Answer

A) imposes a single tax upon transfers of property during an individual's lifetime only. 
B) imposes a single tax upon transfers of property during an individual's life and at death. 
C) imposes a single tax upon transfers of property only at an individual's death. 
D) none of above. 
A) imposes a single tax upon transfers of property during an individual's lifetime only. 
B) imposes a single tax upon transfers of property during an individual's life and at death. 
C) imposes a single tax upon transfers of property only at an individual's death. 
D) none of above.

Question 7

The Internal Revenue Service is the branch of the Treasury Department responsible for administering the federal tax law.

Accepted Answer

A) True 
 B)False

Question 8

In an S corporation,shareholders

Accepted Answer

A) are taxed on their proportionate share of earnings. 
B) are taxed only on dividends. 
C) may allocate income among themselves in order to consider special contributions. 
D) are only taxed on salaries. 
A) are taxed on their proportionate share of earnings. 
B) are taxed only on dividends. 
C) may allocate income among themselves in order to consider special contributions. 
D) are only taxed on salaries.

Question 9

Vertical equity means that

Accepted Answer

A) taxpayers with the same amount of income should pay the same amount of tax. 
B) taxpayers with larger amounts of income should pay more tax than taxpayers with lower amounts of income. 
C) all taxpayers should pay the same tax. 
D) none of the above. 
A) taxpayers with the same amount of income should pay the same amount of tax. 
B) taxpayers with larger amounts of income should pay more tax than taxpayers with lower amounts of income. 
C) all taxpayers should pay the same tax. 
D) none of the above.

Question 10

Shaquille buys new cars for five of his friends.Each car cost $70,000.What is the amount of Shaquille's taxable gifts?

Accepted Answer

A) $0 
B) $280,000 
C) $336,000 
D) $350,000 
A) $0 
B) $280,000 
C) $336,000 
D) $350,000

Question 11

All of the following statements are true except

Accepted Answer

A) the net income earned by a sole proprietorship is reported on the owner's individual income tax return. 
B) the net income of an S corporation is subject to double taxation because it is taxed at the entity level and dividends paid from the S corporation to individual shareholders are also taxed. 
C) the net income of C corporation is subject to double taxation because it is taxed at the entity level and dividends paid from the C corporation to individual shareholders is also taxed. 
D) LLCs are generally taxed as partnerships. 
A) the net income earned by a sole proprietorship is reported on the owner's individual income tax return. 
B) the net income of an S corporation is subject to double taxation because it is taxed at the entity level and dividends paid from the S corporation to individual shareholders are also taxed. 
C) the net income of C corporation is subject to double taxation because it is taxed at the entity level and dividends paid from the C corporation to individual shareholders is also taxed. 
D) LLCs are generally taxed as partnerships.

Question 12

The largest source of federal revenues is the corporate income tax.

Accepted Answer

A) True 
 B)False

Question 13

When new tax legislation is being considered by Congress,

Accepted Answer

A) the tax bill will usually originate in the Senate. 
B) different versions of the House and Senate bills are reconciled by the Speaker of the House and the President of the Senate. 
C) different versions of the House and Senate bills are reconciled by a Joint Conference Committee. 
D) after the President of the U.S.approves a tax bill,the Joint Conference Committee must then vote on passage of the bill. 
A) the tax bill will usually originate in the Senate. 
B) different versions of the House and Senate bills are reconciled by the Speaker of the House and the President of the Senate. 
C) different versions of the House and Senate bills are reconciled by a Joint Conference Committee. 
D) after the President of the U.S.approves a tax bill,the Joint Conference Committee must then vote on passage of the bill.

Question 14

Vincent makes the following gifts during 2016:
$15,000 cash gift to wife
Gift of automobile valued at $35,000 to his adult son
Gift of golf clubs valued at $5,000 to a friend
$10,000 contribution to church
Although he is married,none of the gifts are considered joint gifts with his wife.What are the total taxable gifts subject to the unified transfer tax?

Accepted Answer

The answer of Vincent makes the following gifts during 2016:
$15,000...

Question 15

Rocky and Charlie form RC Partnership as equal partners.Rocky contributes $100,000 into RC while Charlie contributes real estate with a cost and fair market value of $100,000.During the current year,RC earned net income of $600,000.The partnership distributes $200,000 to each partner.The amount that Rocky should report on his individual tax return is

Accepted Answer

A) $0. 
B) $100,000. 
C) $200,000. 
D) $300,000. 
A) $0. 
B) $100,000. 
C) $200,000. 
D) $300,000.

Question 16

A tax bill introduced in the House of Representatives is then

Accepted Answer

A) referred to the House Ways and Means Committee for hearings and approval. 
B) referred to the full House for hearings. 
C) forwarded to the Senate Finance Committee for consideration. 
D) voted upon by the full House. 
A) referred to the House Ways and Means Committee for hearings and approval. 
B) referred to the full House for hearings. 
C) forwarded to the Senate Finance Committee for consideration. 
D) voted upon by the full House.

Question 17

The unified transfer tax system,comprised of the gift and estate taxes,is based upon the total property transfers an individual makes during lifetime and at death.

Accepted Answer

A) True 
 B)False

Question 18

If a taxpayer's total tax liability is $4,000,taxable income is $20,000,and total economic income is $40,000,then the effective tax rate is 20 percent.

Accepted Answer

A) True 
 B)False

Question 19

A presidential candidate proposes replacing the income tax with a national sales tax.The sales tax would have a flat rate.Describe the impact of this change in terms of tax structure and equity.

Accepted Answer

The change would replace a progressive t

Question 20

Which of the following taxes is progressive?

Accepted Answer

A) sales tax 
B) excise tax 
C) property tax 
D) federal income tax 
A) sales tax 
B) excise tax 
C) property tax 
D) federal income tax

Describe the nondeductible penalties imposed upon taxpayers for failure to comply.

Describe the types of audits that the IRS conducts.

Kate files her tax return 36 days after the due date.When she files the return,she sends a check for $2,000 which is the balance of the tax owed by her.Kate's penalty for failure to file a return will be

Which of the following is not an advantage of a limited liability company (LLC)?

Which of the following is not a social objective of the tax law?

The unified transfer tax system

The Internal Revenue Service is the branch of the Treasury Department responsible for administering the federal tax law.

In an S corporation,shareholders

Vertical equity means that

Shaquille buys new cars for five of his friends.Each car cost $70,000.What is the amount of Shaquille's taxable gifts?

All of the following statements are true except

The largest source of federal revenues is the corporate income tax.

When new tax legislation is being considered by Congress,

A tax bill introduced in the House of Representatives is then

The unified transfer tax system,comprised of the gift and estate taxes,is based upon the total property transfers an individual makes during lifetime and at death.

If a taxpayer's total tax liability is $4,000,taxable income is $20,000,and total economic income is $40,000,then the effective tax rate is 20 percent.

A presidential candidate proposes replacing the income tax with a national sales tax.The sales tax would have a flat rate.Describe the impact of this change in terms of tax structure and equity.

Which of the following taxes is progressive?

Determination of Tax

Gross Income: Inclusions

Gross Income: Exclusions

Property Transactions: Capital Gains and Losses

Deductions and Losses

Itemized Deductions

Losses and Bad Debts

Employee Expenses and Deferred Compensation

Depreciation, cost Recovery, amortization, and Depletion

Accounting Periods and Methods

Property Transactions: Nontaxable Exchanges

Property Transactions: Section 1231 and Recapture

Special Tax Computation Methods, tax Credits, and Payment of Tax

Tax Research

Corporations

Partnerships and S Corporations

Taxes and Investment Planning

Filters

Exam 1: An Introduction to Taxation

Describe the nondeductible penalties imposed upon taxpayers for failure to comply.

Describe the types of audits that the IRS conducts.

Kate files her tax return 36 days after the due date.When she files the return,she sends a check for $2,000 which is the balance of the tax owed by her.Kate's penalty for failure to file a return will be

Which of the following is not an advantage of a limited liability company (LLC)?

Which of the following is not a social objective of the tax law?

The unified transfer tax system

The Internal Revenue Service is the branch of the Treasury Department responsible for administering the federal tax law.

In an S corporation,shareholders

Vertical equity means that

Shaquille buys new cars for five of his friends.Each car cost $70,000.What is the amount of Shaquille's taxable gifts?

All of the following statements are true except

The largest source of federal revenues is the corporate income tax.

When new tax legislation is being considered by Congress,

A tax bill introduced in the House of Representatives is then

The unified transfer tax system,comprised of the gift and estate taxes,is based upon the total property transfers an individual makes during lifetime and at death.

If a taxpayer's total tax liability is $4,000,taxable income is $20,000,and total economic income is $40,000,then the effective tax rate is 20 percent.

A presidential candidate proposes replacing the income tax with a national sales tax.The sales tax would have a flat rate.Describe the impact of this change in terms of tax structure and equity.

Which of the following taxes is progressive?

Determination of Tax

Gross Income: Inclusions

Gross Income: Exclusions

Property Transactions: Capital Gains and Losses

Deductions and Losses

Itemized Deductions

Losses and Bad Debts

Employee Expenses and Deferred Compensation

Depreciation, cost Recovery, amortization, and Depletion

Accounting Periods and Methods

Property Transactions: Nontaxable Exchanges

Property Transactions: Section 1231 and Recapture

Special Tax Computation Methods, tax Credits, and Payment of Tax

Tax Research

Corporations

Partnerships and S Corporations

Taxes and Investment Planning

Filters