Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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 3

The Senate equivalent of the House Ways and Means Committee is the Senate

Accepted Answer

A) Joint Committee on Taxation. 
B) Ways and Means Committee. 
C) Finance Committee. 
D) Joint Conference Committee. 
A) Joint Committee on Taxation. 
B) Ways and Means Committee. 
C) Finance Committee. 
D) Joint Conference Committee.

Question 4

Brad and Angie had the following income and deductions during 2098:
Salaries $110,000
Interest income 10,000
Itemized deductions 26,000
Taxes withheld during year 12,000
Calculate Brad and Angie's tax liability due or refund.They file a joint tax return.

Accepted Answer

@#IMG-DLM& Tax = $9,086 + .22(

Question 5

Briana,who is single,has taxable income for 2019 of $90,000,resulting in a total tax of $15,775.Her total economic income is $100,000.Briana's average tax rate and effective tax rate are,respectively,

Accepted Answer

A) 17.53% and 15.78%. 
B) 17.53% and 24%. 
C) 15.78% and 24%. 
D) 15.78% and 17.53%. 
A) 17.53% and 15.78%. 
B) 17.53% and 24%. 
C) 15.78% and 24%. 
D) 15.78% and 17.53%.

Question 6

Which is not a component of tax practice?

Accepted Answer

A) providing clients tax refund advance loans 
B) tax research 
C) tax planning and consulting 
D) compliance 
A) providing clients tax refund advance loans 
B) tax research 
C) tax planning and consulting 
D) compliance

Question 7

Charlotte pays $8,000 in tax deductible property taxes.Charlotte's marginal tax rate is 24%,effective tax rate is 20% and average rate is 22%.Charlotte's tax savings from paying the property tax is

Accepted Answer

A) $1,600. 
B) $1,760. 
C) $1,920. 
D) $8,000. 
A) $1,600. 
B) $1,760. 
C) $1,920. 
D) $8,000.

Question 8

Jose dies in the current year and has a gross estate valued at $13,000,000 in 2019.Over the past ten years,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?

Accepted Answer

A) $12,100,000 
B) $12,500,000 
C) $700,000 
D) $1,100,000 
A) $12,100,000 
B) $12,500,000 
C) $700,000 
D) $1,100,000

Question 9

Tercot Partnership reported $1,000,000 of business receipts,$700,000 of business deductions,and $100,000 of interest income.Terry is a 50% partner in Tercot Partnership.On Terry's return,she will be entitled to a deduction for qualified business income of

Accepted Answer

A) $60,000. 
B) $80,000. 
C) $40,000. 
D) $30,000. 
A) $60,000. 
B) $80,000. 
C) $40,000. 
D) $30,000.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Regressive tax rates decrease as the tax base increases.

Accepted Answer

A) True 
 B)False

Question 12

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 13

An individual will be subject to gift tax on gifts made to a charity greater than $15,000.

Accepted Answer

A) True 
 B)False

Question 14

The various entities in the federal income tax system may be classified into two general categories,taxpaying entities (such as individuals and C [regular] corporations)and flow-through entities such as sole proprietorships,partnerships,S corporations,and limited liability companies.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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 United States 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 United States approves a tax bill,the Joint Conference Committee must then vote on passage of the bill.

Question 17

Alan files his 2018 tax return on April 1,2019,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

Accepted Answer

A) April 1,2023. 
B) April 15,2022. 
C) April 15,2023. 
D) The statute of limitations never expires. 
A) April 1,2023. 
B) April 15,2022. 
C) April 15,2023. 
D) The statute of limitations never expires.

Question 18

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) $275,000 
C) $335,000 
D) $350,000 
A) $0 
B) $275,000 
C) $335,000 
D) $350,000

Question 19

Which of the following individuals is most likely to be audited?

Accepted Answer

A) Lola has AGI of $35,000 from wages and uses the standard deduction. 
B) Marvella has a $145,000 net loss from her unincorporated business (a horse farm).She also received $950,000 salary as a CEO of a corporation. 
C) Melvin is retired and receives Social Security benefits. 
D) Jerry is a school teacher with two children earning $55,000 a year.He also receives $200 in interest income on a bank account. 
A) Lola has AGI of $35,000 from wages and uses the standard deduction. 
B) Marvella has a $145,000 net loss from her unincorporated business (a horse farm).She also received $950,000 salary as a CEO of a corporation. 
C) Melvin is retired and receives Social Security benefits. 
D) Jerry is a school teacher with two children earning $55,000 a year.He also receives $200 in interest income on a bank account.

Question 20

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

Exam 17: an Introduction to Taxation

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

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

The Senate equivalent of the House Ways and Means Committee is the Senate

Brad and Angie had the following income and deductions during 2098: Salaries $110,000 Interest income 10,000 Itemized deductions 26,000 Taxes withheld during year 12,000 Calculate Brad and Angie's tax liability due or refund.They file a joint tax return.

Briana,who is single,has taxable income for 2019 of $90,000,resulting in a total tax of $15,775.Her total economic income is $100,000.Briana's average tax rate and effective tax rate are,respectively,

Which is not a component of tax practice?

Charlotte pays $8,000 in tax deductible property taxes.Charlotte's marginal tax rate is 24%,effective tax rate is 20% and average rate is 22%.Charlotte's tax savings from paying the property tax is

Tercot Partnership reported $1,000,000 of business receipts,$700,000 of business deductions,and $100,000 of interest income.Terry is a 50% partner in Tercot Partnership.On Terry's return,she will be entitled to a deduction for qualified business income of

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

Regressive tax rates decrease as the tax base increases.

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

An individual will be subject to gift tax on gifts made to a charity greater than $15,000.

The various entities in the federal income tax system may be classified into two general categories,taxpaying entities (such as individuals and C [regular] corporations)and flow-through entities such as sole proprietorships,partnerships,S corporations,and limited liability companies.

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

When new tax legislation is being considered by Congress

Alan files his 2018 tax return on April 1,2019,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

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

Which of the following individuals is most likely to be audited?

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

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