Question 1

Like the Federal counterpart,the amount of the state excise taxes on gasoline varies from state to state.

Accepted Answer

A) True 
 B)False

Question 2

A fixture will be subject to the ad valorem tax on personalty rather than the ad valorem tax on realty.

Accepted Answer

A) True 
 B)False

Question 3

Julius,a married taxpayer,makes gifts to each of his six children.A maximum of twelve annual exclusions could be allowed as to these gifts.

Accepted Answer

A) True 
 B)False

Question 4

The tax law allows an income tax deduction (or a credit)for foreign income taxes.Explain why.

Accepted Answer

The deduction (or a credit)for

Question 5

Several years ago,Logan purchased extra grazing land for his ranch at a cost of $240,000.In 2013,the land is condemned by the state for development as a highway maintenance depot.Under the condemnation award,Logan receives $600,000 for the land.Within the same year,he replaces the property with other grazing land.What is Logan's tax situation if the replacement land cost:
 $\begin{array}{ll}
\text { a. } & \$ 210,000 ? \
\text { b. } & \$ 360,000 ? \
\text { c. } & \$ 630,000 ? \
\text { d. } & \text { Why? }
\end{array}$

Accepted Answer

The answer of Several years ago,Logan purchased extra grazing land...

Question 6

Social considerations can be used to justify:

Accepted Answer

A) Allowance of a credit for child care expenses. 
B) Allowing excess capital losses to be carried over to other years. 
C) Allowing accelerated amortization for the cost of installing pollution control facilities. 
D) Allowing a Federal income tax deduction for state and local sales taxes. 
E) None of the above. 
A) Allowance of a credit for child care expenses. 
B) Allowing excess capital losses to be carried over to other years. 
C) Allowing accelerated amortization for the cost of installing pollution control facilities. 
D) Allowing a Federal income tax deduction for state and local sales taxes. 
E) None of the above.

Question 7

Tomas owns a sole proprietorship,and Lucy is the sole shareholder of a C corporation.In the current year both businesses make a net profit of $60,000.Neither business distributes any funds to the owners in the year.For the current year,Tomas must report $60,000 of income on his individual tax return,but Lucy is not required to report any income from the corporation on her individual tax return.

Accepted Answer

A) True 
 B)False

Question 8

Which,if any,of the following is a typical characteristic of an ad valorem tax on personalty?

Accepted Answer

A) Taxpayer compliance is greater for personal use property than for business use property. 
B) The tax on automobiles sometimes considers the age of the vehicle. 
C) Most states impose a tax on intangibles. 
D) The tax on intangibles generates considerable revenue since it is difficult for taxpayers to avoid. 
E) None of the above. 
A) Taxpayer compliance is greater for personal use property than for business use property. 
B) The tax on automobiles sometimes considers the age of the vehicle. 
C) Most states impose a tax on intangibles. 
D) The tax on intangibles generates considerable revenue since it is difficult for taxpayers to avoid. 
E) None of the above.

Question 9

Two persons who live in the same state but in different counties may not be subject to the same general sales tax rate.

Accepted Answer

A) True 
 B)False

Question 10

To lessen,or eliminate,the effect of multiple taxation,a taxpayer who is subject to both foreign and U.S.income taxes on the same income is allowed either a deduction or a credit for the foreign tax paid.

Accepted Answer

A) True 
 B)False

Question 11

Both economic and social considerations can be used to justify:

Accepted Answer

A) Favorable tax treatment for accident and health plans provided for employees and financed by employers. 
B) Disallowance of any deduction for expenditures deemed to be contrary to public policy (e.g.,fines,penalties,illegal kickbacks,bribes to government officials). 
C) Various tax credits,deductions,and exclusions that are designed to encourage taxpayers to obtain additional education. 
D) Allowance of a deduction for state and local income taxes paid. 
E) None of the above. 
A) Favorable tax treatment for accident and health plans provided for employees and financed by employers. 
B) Disallowance of any deduction for expenditures deemed to be contrary to public policy (e.g.,fines,penalties,illegal kickbacks,bribes to government officials). 
C) Various tax credits,deductions,and exclusions that are designed to encourage taxpayers to obtain additional education. 
D) Allowance of a deduction for state and local income taxes paid. 
E) None of the above.

Question 12

Carol and Candace are equal partners in Peach Partnership.In the current year,Peach had a net profit of $75,000 ($250,000 gross income - $175,000 operating expenses)and distributed $25,000 to each partner.Peach must pay tax on $75,000 of income.

Accepted Answer

A) True 
 B)False

Question 13

During the current year,Maroon Company had $125,000 net profit from operations.Belinda,the sole owner of Maroon,is in the 33% marginal tax bracket.Determine the combined tax burden for Maroon and Belinda under the following independent situations.(Ignore any employment taxes.)
 a. Maroon Company is a C corporation and all of its after-tax income is distributed to Belinda.
b. Maroon Company is a proprietor ship and all of its after-tax income is withdrawn by Belinda
c. Maroon Company is an S corporation and all of its after-tax income is distributed to Belinda

Accepted Answer

The answer of During the current year,Maroon Company had $125,000...

Question 14

Quail Corporation is a C corporation with net income of $125,000 during the current year.If Quail paid dividends of $25,000 to its shareholders,the corporation must pay tax on $100,000 of net income.Shareholders must report the $25,000 of dividends as income.

Accepted Answer

A) True 
 B)False

Question 15

The tax law contains various tax credits,deductions,and exclusions that are designed to encourage taxpayers to obtain additional education.On what grounds can these provisions be justified?

Accepted Answer

Social and economic considerat

Question 16

Compare the basic tax and nontax factors of doing business as a partnership,an S corporation,and a C corporation.Circle the correct answers.

Accepted Answer

The correc

Question 17

Which,if any,of the following transactions will increase a taxing jurisdiction's revenue from the ad valorem tax imposed on real estate?

Accepted Answer

A) A resident dies and leaves his farm to his church. 
B) A large property owner issues a conservation easement as to some of her land. 
C) A tax holiday issued 10 years ago has expired. 
D) A bankrupt motel is acquired by the Red Cross and is to be used to provide housing for homeless persons. 
E) None of the above. 
A) A resident dies and leaves his farm to his church. 
B) A large property owner issues a conservation easement as to some of her land. 
C) A tax holiday issued 10 years ago has expired. 
D) A bankrupt motel is acquired by the Red Cross and is to be used to provide housing for homeless persons. 
E) None of the above.

Question 18

A characteristic of FUTA is that:

Accepted Answer

A) It is imposed on both employer and employee. 
B) It is imposed solely on the employee. 
C) Compliance requires following guidelines issued by both state and Federal regulatory authorities. 
D) It is applicable to spouses of employees but not to any children under age 18. 
E) None of the above. 
A) It is imposed on both employer and employee. 
B) It is imposed solely on the employee. 
C) Compliance requires following guidelines issued by both state and Federal regulatory authorities. 
D) It is applicable to spouses of employees but not to any children under age 18. 
E) None of the above.

Question 19

When Congress enacts a tax cut that is phased in over a period of years,revenue neutrality is achieved.

Accepted Answer

A) True 
 B)False

Question 20

Bjorn owns a 60% interest in an S corporation that earned $150,000 in 2013.He also owns 60% of the stock in a C corporation that earned $150,000 during the year.The S corporation distributed $30,000 to Bjorn and the C corporation paid dividends of $30,000 to Bjorn.How much income must Bjorn report from these businesses?

Accepted Answer

A) $0 income from the S corporation and $30,000 income from the C corporation. 
B) $30,000 income from the S corporation and $30,000 of dividend income from the C corporation. 
C) $90,000 income from the S corporation and $0 income from the C corporation. 
D) $90,000 income from the S corporation and $30,000 income from the C corporation. 
E) None of the above. 
A) $0 income from the S corporation and $30,000 income from the C corporation. 
B) $30,000 income from the S corporation and $30,000 of dividend income from the C corporation. 
C) $90,000 income from the S corporation and $0 income from the C corporation. 
D) $90,000 income from the S corporation and $30,000 income from the C corporation. 
E) None of the above.

Like the Federal counterpart,the amount of the state excise taxes on gasoline varies from state to state.

A fixture will be subject to the ad valorem tax on personalty rather than the ad valorem tax on realty.

Julius,a married taxpayer,makes gifts to each of his six children.A maximum of twelve annual exclusions could be allowed as to these gifts.

The tax law allows an income tax deduction (or a credit)for foreign income taxes.Explain why.

Social considerations can be used to justify:

Which,if any,of the following is a typical characteristic of an ad valorem tax on personalty?

Two persons who live in the same state but in different counties may not be subject to the same general sales tax rate.

To lessen,or eliminate,the effect of multiple taxation,a taxpayer who is subject to both foreign and U.S.income taxes on the same income is allowed either a deduction or a credit for the foreign tax paid.

Both economic and social considerations can be used to justify:

Carol and Candace are equal partners in Peach Partnership.In the current year,Peach had a net profit of $75,000 ($250,000 gross income - $175,000 operating expenses)and distributed $25,000 to each partner.Peach must pay tax on $75,000 of income.

Quail Corporation is a C corporation with net income of $125,000 during the current year.If Quail paid dividends of $25,000 to its shareholders,the corporation must pay tax on $100,000 of net income.Shareholders must report the $25,000 of dividends as income.

The tax law contains various tax credits,deductions,and exclusions that are designed to encourage taxpayers to obtain additional education.On what grounds can these provisions be justified?

Compare the basic tax and nontax factors of doing business as a partnership,an S corporation,and a C corporation.Circle the correct answers.

Which,if any,of the following transactions will increase a taxing jurisdiction's revenue from the ad valorem tax imposed on real estate?

A characteristic of FUTA is that:

When Congress enacts a tax cut that is phased in over a period of years,revenue neutrality is achieved.

Working With the Tax Law

Taxes on the Financial Statements

Gross Income

Business Deductions

Losses and Loss Limitations

Property Transactions: Basis, gain and Loss, and Nontaxable Exchange

Property Transactions: Capital Gains and Losses, section 1231, and Recapture Provisions

Corporations: Organization, capital Structure, and Operating Rules

Corporations: Earnings Profits and Distributions

Partnerships and Limited Liability Entities

S Corporations

Multijurisdictional Taxation

Business Tax Credits and Corporate Alternative Minimum Tax

Comparative Forms of Doing Business

Introduction to the Taxation of Individuals

Individuals As Employees and Proprietors

Filters

Exam 1: Introduction to Taxation

Like the Federal counterpart,the amount of the state excise taxes on gasoline varies from state to state.

A fixture will be subject to the ad valorem tax on personalty rather than the ad valorem tax on realty.

Julius,a married taxpayer,makes gifts to each of his six children.A maximum of twelve annual exclusions could be allowed as to these gifts.

The tax law allows an income tax deduction (or a credit)for foreign income taxes.Explain why.

Social considerations can be used to justify:

Which,if any,of the following is a typical characteristic of an ad valorem tax on personalty?

Two persons who live in the same state but in different counties may not be subject to the same general sales tax rate.

To lessen,or eliminate,the effect of multiple taxation,a taxpayer who is subject to both foreign and U.S.income taxes on the same income is allowed either a deduction or a credit for the foreign tax paid.

Both economic and social considerations can be used to justify:

Carol and Candace are equal partners in Peach Partnership.In the current year,Peach had a net profit of $75,000 ($250,000 gross income - $175,000 operating expenses)and distributed $25,000 to each partner.Peach must pay tax on $75,000 of income.

Quail Corporation is a C corporation with net income of $125,000 during the current year.If Quail paid dividends of $25,000 to its shareholders,the corporation must pay tax on $100,000 of net income.Shareholders must report the $25,000 of dividends as income.

The tax law contains various tax credits,deductions,and exclusions that are designed to encourage taxpayers to obtain additional education.On what grounds can these provisions be justified?

Compare the basic tax and nontax factors of doing business as a partnership,an S corporation,and a C corporation.Circle the correct answers.

Which,if any,of the following transactions will increase a taxing jurisdiction's revenue from the ad valorem tax imposed on real estate?

A characteristic of FUTA is that:

When Congress enacts a tax cut that is phased in over a period of years,revenue neutrality is achieved.

Working With the Tax Law

Taxes on the Financial Statements

Gross Income

Business Deductions

Losses and Loss Limitations

Property Transactions: Basis, gain and Loss, and Nontaxable Exchange

Property Transactions: Capital Gains and Losses, section 1231, and Recapture Provisions

Corporations: Organization, capital Structure, and Operating Rules

Corporations: Earnings Profits and Distributions

Partnerships and Limited Liability Entities

S Corporations

Multijurisdictional Taxation

Business Tax Credits and Corporate Alternative Minimum Tax

Comparative Forms of Doing Business

Introduction to the Taxation of Individuals

Individuals As Employees and Proprietors

Filters