Question 1

All of the following are classified as flow-through entities for tax purposes except

Accepted Answer

A) partnerships. 
B) C corporations. 
C) S corporations. 
D) limited liability companies. 
A) partnerships. 
B) C corporations. 
C) S corporations. 
D) limited liability companies.

Question 2

Kole earns $140,000 in 2019 in his job as a sales manager.What is his FICA tax?

Accepted Answer

A) $10,270 
B) $8,240 
C) $10,710 
D) $10,167 
A) $10,270 
B) $8,240 
C) $10,710 
D) $10,167

Question 3

The IRS must pay interest on

Accepted Answer

A) all tax refunds. 
B) tax refunds paid later than 30 days after the due date. 
C) tax refunds paid later than 45 days after the due date. 
D) The IRS never pays interest on tax refunds. 
A) all tax refunds. 
B) tax refunds paid later than 30 days after the due date. 
C) tax refunds paid later than 45 days after the due date. 
D) The IRS never pays interest on tax refunds.

Question 4

Which of the following serves as the highest authority for tax research,planning,and compliance activities?

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 5

Signal Corporation is an S corporation owned equally by Serena and three other shareholders.The corporation reported $900,000 of business receipts,$500,000 of business deductions and $40,000 of dividend income.On Serena's return,she will be entitled to a deduction for qualified business income of

Accepted Answer

A) $20,000. 
B) $22,000. 
C) $80,000. 
D) $88,000. 
A) $20,000. 
B) $22,000. 
C) $80,000. 
D) $88,000.

Question 6

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 7

Flow-through entities do not have to file tax returns since they are not taxable entities.

Accepted Answer

A) True 
 B)False

Question 8

The federal income tax is the dominant form of taxation by the federal government.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Dividends paid from most U.S.corporations are taxed at the same rate as the recipients' salaries and wages.

Accepted Answer

A) True 
 B)False

Question 11

The tax law encompasses administrative and judicial interpretations,such as Treasury regulations,revenue rulings,revenue procedures,and court decisions,as well as statutes.

Accepted Answer

A) True 
 B)False

Question 12

Sarah contributes $25,000 to a church.Sarah's marginal tax rate is 35% while her average tax rate is 25%.After considering her tax savings,Sarah's contribution costs

Accepted Answer

A) $6,250. 
B) $8,750. 
C) $16,250. 
D) $18,750. 
A) $6,250. 
B) $8,750. 
C) $16,250. 
D) $18,750.

Question 13

Horizontal 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 14

Which of the following is not an objective of the federal income tax law?

Accepted Answer

A) Stimulate private investment. 
B) Redistribution of wealth. 
C) Encourage research and development activities. 
D) Prevent taxpayers from paying a higher percentage of their income in personal income taxes due to inflation. 
A) Stimulate private investment. 
B) Redistribution of wealth. 
C) Encourage research and development activities. 
D) Prevent taxpayers from paying a higher percentage of their income in personal income taxes due to inflation.

Question 15

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 16

A taxpayer's average tax rate is the tax rate applied to an incremental amount of taxable income that is added to the tax base.

Accepted Answer

A) True 
 B)False

Question 17

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 18

The terms "progressive tax" and "flat tax" are synonymous.

Accepted Answer

A) True 
 B)False

Question 19

Jeffery died in 2019 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 2019 (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 which were paid by the estate,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 $4,505,800?
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?

Accepted Answer

@#IMG-DLM& d.The alternate valuation date (six mon

Question 20

If a taxpayer's total tax liability is $30,000,taxable income is $100,000,and economic income is $120,000,the average tax rate is 30 percent.

Accepted Answer

A) True 
 B)False

Exam 17: an Introduction to Taxation

All of the following are classified as flow-through entities for tax purposes except

Kole earns $140,000 in 2019 in his job as a sales manager.What is his FICA tax?

The IRS must pay interest on

Which of the following serves as the highest authority for tax research,planning,and compliance activities?

Signal Corporation is an S corporation owned equally by Serena and three other shareholders.The corporation reported $900,000 of business receipts,$500,000 of business deductions and $40,000 of dividend income.On Serena's return,she will be entitled to a deduction for qualified business income of

Which of the following taxes is progressive?

Flow-through entities do not have to file tax returns since they are not taxable entities.

The federal income tax is the dominant form of taxation by the federal government.

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

Dividends paid from most U.S.corporations are taxed at the same rate as the recipients' salaries and wages.

The tax law encompasses administrative and judicial interpretations,such as Treasury regulations,revenue rulings,revenue procedures,and court decisions,as well as statutes.

Sarah contributes $25,000 to a church.Sarah's marginal tax rate is 35% while her average tax rate is 25%.After considering her tax savings,Sarah's contribution costs

Horizontal equity means that

Which of the following is not an objective of the federal income tax law?

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

A taxpayer's average tax rate is the tax rate applied to an incremental amount of taxable income that is added to the tax base.

The unified transfer tax system

The terms "progressive tax" and "flat tax" are synonymous.

If a taxpayer's total tax liability is $30,000,taxable income is $100,000,and economic income is $120,000,the average tax rate is 30 percent.

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

U.S. Taxation of Foreign-Related Transactions

Determination of Tax

Gross Income: Inclusions

Gross Income: Exclusions

Property Transactions: Capital Gains and Losses

Deductions and Losses

Business Expenses and Deferred Compensation

Itemized Deductions

Losses and Bad Debts

Depreciation,cost Recovery,amortization,and Depletion

Accounting Periods and Methods

Property Transactions: Nontaxable Exchanges

Property Transactions: Sec1231 and Recapture

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

Tax Research

Corporations

Partnerships and S Corporations

Taxes and Investment Planning

Filters