Question 1

Adam Smith's canons of taxation are equity, certainty, convenience and economy.

Accepted Answer

A) True 
 B)False

Question 2

Limited liability companies may elect to be taxed as corporations.

Accepted Answer

A) True 
 B)False

Question 3

Arthur pays tax of $5,000 on taxable income of $50,000 while taxpayer Barbara pays tax of $12,000 on $120,000. The tax is a

Accepted Answer

A)  progressive tax. 
B)  proportional tax. 
C)  regressive tax. 
D)  None of the above. 
A)  progressive tax. 
B)  proportional tax. 
C)  regressive tax. 
D)  None of the above.

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Brad and Angie had the following income and deductions during 2015:   Calculate Brad and Angie's tax liability due or refund, assuming that they have 2 personal exemptions. They file a joint tax return.

Accepted Answer

@#IMG-DLM& Tax = $10,312.50 + .25(96,000

Question 6

Regressive tax rates decrease as the tax base increases.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Vincent makes the following gifts during 2015:
$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 2015:
$15,000...

Question 9

When a change in the tax law is deemed necessary by Congress, the entire Internal Revenue Code must be revised.

Accepted Answer

A) True 
 B)False

Question 10

AB Partnership earns $500,000 in the current year. Partners A and B are equal partners who do not receive any distributions during the year. How much income does partner A report from the partnership?

Accepted Answer

A)  $0 
B)  $250,000 
C)  $500,000 
D)  None of the above. 
A)  $0 
B)  $250,000 
C)  $500,000 
D)  None of the above.

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

When property is transferred, the gift tax is based on

Accepted Answer

A)  replacement cost of the transferred property. 
B)  fair market value on the date of transfer. 
C)  the transferor's original cost of the transferred property. 
D)  the transferor's depreciated cost of the transferred property. 
A)  replacement cost of the transferred property. 
B)  fair market value on the date of transfer. 
C)  the transferor's original cost of the transferred property. 
D)  the transferor's depreciated cost of the transferred property.

Question 13

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

Question 14

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 15

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 16

All of the following are executive (administrative) sources of tax law except

Accepted Answer

A)  Internal Revenue Code. 
B)  Income Tax Regulations. 
C)  Revenue Rulings. 
D)  Revenue Procedures. 
A)  Internal Revenue Code. 
B)  Income Tax Regulations. 
C)  Revenue Rulings. 
D)  Revenue Procedures.

Question 17

Gifts between spouses are generally exempt from transfer taxes.

Accepted Answer

A) True 
 B)False

Question 18

Vertical equity means that

Accepted Answer

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

Question 19

Horizontal equity means that

Accepted Answer

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

Question 20

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

Adam Smith's canons of taxation are equity, certainty, convenience and economy.

Limited liability companies may elect to be taxed as corporations.

Arthur pays tax of $5,000 on taxable income of $50,000 while taxpayer Barbara pays tax of $12,000 on $120,000. The tax is a

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

Brad and Angie had the following income and deductions during 2015: Calculate Brad and Angie's tax liability due or refund, assuming that they have 2 personal exemptions. They file a joint tax return.

Regressive tax rates decrease as the tax base increases.

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

When a change in the tax law is deemed necessary by Congress, the entire Internal Revenue Code must be revised.

AB Partnership earns $500,000 in the current year. Partners A and B are equal partners who do not receive any distributions during the year. How much income does partner A report from the partnership?

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

When property is transferred, the gift tax is based on

Which of the following taxes is progressive?

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

In an S corporation, shareholders

All of the following are executive (administrative) sources of tax law except

Gifts between spouses are generally exempt from transfer taxes.

Vertical equity means that

Horizontal equity means that

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.

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

Filters

Exam 1: An Introduction to Taxation

Adam Smith's canons of taxation are equity, certainty, convenience and economy.

Limited liability companies may elect to be taxed as corporations.

Arthur pays tax of $5,000 on taxable income of $50,000 while taxpayer Barbara pays tax of $12,000 on $120,000. The tax is a

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

Brad and Angie had the following income and deductions during 2015: Calculate Brad and Angie's tax liability due or refund, assuming that they have 2 personal exemptions. They file a joint tax return.

Regressive tax rates decrease as the tax base increases.

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

When a change in the tax law is deemed necessary by Congress, the entire Internal Revenue Code must be revised.

AB Partnership earns $500,000 in the current year. Partners A and B are equal partners who do not receive any distributions during the year. How much income does partner A report from the partnership?

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

When property is transferred, the gift tax is based on

Which of the following taxes is progressive?

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

In an S corporation, shareholders

All of the following are executive (administrative) sources of tax law except

Gifts between spouses are generally exempt from transfer taxes.

Vertical equity means that

Horizontal equity means that

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.

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

Filters