Question 1

There is a Federal excise tax on hotel occupancy.

Accepted Answer

A) True 
 B)False

Question 2

Property can be transferred within the family group by gift or at death. One motivation for preferring the gift approach is:

Accepted Answer

A)  To take advantage of the higher unified transfer tax credit available under the gift tax. 
B)  To avoid a future decline in value of the property transferred. 
C)  To take advantage of the per donee annual exclusion. 
D)  To shift income to higher bracket donees. 
E)  None of these. 
A)  To take advantage of the higher unified transfer tax credit available under the gift tax. 
B)  To avoid a future decline in value of the property transferred. 
C)  To take advantage of the per donee annual exclusion. 
D)  To shift income to higher bracket donees. 
E)  None of these.

Question 3

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 these. 
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 these.

Question 4

The pay-as-you-go feature of the Federal income tax on individuals conforms to Adam Smith's canon principle) of certainty.

Accepted Answer

A) True 
 B)False

Question 5

State income taxes generally can be characterized by:

Accepted Answer

A)  The same date for filing as the Federal income tax. 
B)  No provision for withholding procedures. 
C)  Allowance of a deduction for Federal income taxes paid. 
D)  Applying only to individuals and not applying to corporations. 
E)  None of these. 
A)  The same date for filing as the Federal income tax. 
B)  No provision for withholding procedures. 
C)  Allowance of a deduction for Federal income taxes paid. 
D)  Applying only to individuals and not applying to corporations. 
E)  None of these.

Question 6

Not all of the states that impose a general sales tax also have a use tax.

Accepted Answer

A) True 
 B)False

Question 7

Under the usual state inheritance tax, two heirs, a cousin and a son of the deceased, would not be taxed at the same rate.

Accepted Answer

A) True 
 B)False

Question 8

The principal objective of the FUTA tax is to provide some measure of retirement security.

Accepted Answer

A) True 
 B)False

Question 9

Which, if any, of the following statements best describes the history of the Federal income tax?

Accepted Answer

A)  It did not exist during the Civil War. 
B)  The Federal income tax on corporations was held by the U.S. Supreme Court to be allowable under the U.S. Constitution. 
C)  The Federal income tax on individuals was held by the U.S. Supreme Court to be allowable under the U.S. Constitution. 
D)  Both the Federal income tax on individuals and on corporations was held by the U.S. Supreme Court to be contrary to the U.S. Constitution. 
E)  None of these. 
A)  It did not exist during the Civil War. 
B)  The Federal income tax on corporations was held by the U.S. Supreme Court to be allowable under the U.S. Constitution. 
C)  The Federal income tax on individuals was held by the U.S. Supreme Court to be allowable under the U.S. Constitution. 
D)  Both the Federal income tax on individuals and on corporations was held by the U.S. Supreme Court to be contrary to the U.S. Constitution. 
E)  None of these.

Question 10

Taxes levied by all states include:

Accepted Answer

A)  Tobacco excise tax. 
B)  Individual income tax. 
C)  Inheritance tax. 
D)  General sales tax. 
E)  None of these. 
A)  Tobacco excise tax. 
B)  Individual income tax. 
C)  Inheritance tax. 
D)  General sales tax. 
E)  None of these.

Question 11

Before proposing that the state's sales tax be expanded to include food, a legislator should ask whether:

Accepted Answer

A)  the state tax agency will allow this expansion. 
B)  a majority of his constituents agree. 
C)  grocery stores will be able to collect the tax. 
D)  the state's constitution allows for this tax. 
A)  the state tax agency will allow this expansion. 
B)  a majority of his constituents agree. 
C)  grocery stores will be able to collect the tax. 
D)  the state's constitution allows for this tax.

Question 12

The U.S. either Federal, state, or local) does not impose:

Accepted Answer

A)  Franchise taxes. 
B)  Severance taxes. 
C)  Occupational fees. 
D)  Custom duties. 
E)  Export duties. 
A)  Franchise taxes. 
B)  Severance taxes. 
C)  Occupational fees. 
D)  Custom duties. 
E)  Export duties.

Question 13

An excise tax is often used to try to influence behavior.

Accepted Answer

A) True 
 B)False

Question 14

The first income tax on individuals after the ratification of the Sixteenth Amendment to the Constitution) levied tax rates from a low of 2% to a high of 6%.

Accepted Answer

A) True 
 B)False

Question 15

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 16

Upon audit by the IRS, Faith is assessed a deficiency of $40,000 of which $25,000 is attributable to negligence. The 20% negligence penalty will apply to $25,000.

Accepted Answer

A) True 
 B)False

Question 17

Which, if any, is not one of Adam Smith's canons principles) of taxation?

Accepted Answer

A)  Economy in collection 
B)  Certainty 
C)  Convenience of payment 
D)  Simplicity 
E)  Equality 
A)  Economy in collection 
B)  Certainty 
C)  Convenience of payment 
D)  Simplicity 
E)  Equality

Question 18

The IRS agent auditing the return will issue an RAR even if the taxpayer owes no additional taxes.

Accepted Answer

A) True 
 B)False

Question 19

In 1987, Roy leased real estate to Drab Corporation for 20 years. Drab Corporation made significant capital improvements to the property. In 2006, Drab decides not to renew the lease and vacates the property. At that time, the value of the improvements is $800,000. Roy sells the real estate in 2018 for $1,200,000 of which $900,000 is attributable to the improvements. When is Roy taxed on the improvements made by Drab Corporation?

Accepted Answer

Roy is not subject to taxation on the im

Question 20

The ad valorem tax on personal use personalty is more often avoided by taxpayers than the ad valorem tax on business use personalty.

Accepted Answer

A) True 
 B)False

There is a Federal excise tax on hotel occupancy.

Property can be transferred within the family group by gift or at death. One motivation for preferring the gift approach is:

A characteristic of FUTA is that:

The pay-as-you-go feature of the Federal income tax on individuals conforms to Adam Smith's canon principle) of certainty.

State income taxes generally can be characterized by:

Not all of the states that impose a general sales tax also have a use tax.

Under the usual state inheritance tax, two heirs, a cousin and a son of the deceased, would not be taxed at the same rate.

The principal objective of the FUTA tax is to provide some measure of retirement security.

Which, if any, of the following statements best describes the history of the Federal income tax?

Taxes levied by all states include:

Before proposing that the state's sales tax be expanded to include food, a legislator should ask whether:

The U.S. either Federal, state, or local) does not impose:

An excise tax is often used to try to influence behavior.

The first income tax on individuals after the ratification of the Sixteenth Amendment to the Constitution) levied tax rates from a low of 2% to a high of 6%.

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

Upon audit by the IRS, Faith is assessed a deficiency of $40,000 of which $25,000 is attributable to negligence. The 20% negligence penalty will apply to $25,000.

Which, if any, is not one of Adam Smith's canons principles) of taxation?

The IRS agent auditing the return will issue an RAR even if the taxpayer owes no additional taxes.

The ad valorem tax on personal use personalty is more often avoided by taxpayers than the ad valorem tax on business use personalty.

Working With the Tax Law

Tax Formula and Tax Determination an Overview of Property Transactions

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Filters

Exam 1: An Introduction to Taxation and Understanding the Federal Tax Law

There is a Federal excise tax on hotel occupancy.

Property can be transferred within the family group by gift or at death. One motivation for preferring the gift approach is:

A characteristic of FUTA is that:

The pay-as-you-go feature of the Federal income tax on individuals conforms to Adam Smith's canon principle) of certainty.

State income taxes generally can be characterized by:

Not all of the states that impose a general sales tax also have a use tax.

Under the usual state inheritance tax, two heirs, a cousin and a son of the deceased, would not be taxed at the same rate.

The principal objective of the FUTA tax is to provide some measure of retirement security.

Which, if any, of the following statements best describes the history of the Federal income tax?

Taxes levied by all states include:

Before proposing that the state's sales tax be expanded to include food, a legislator should ask whether:

The U.S. either Federal, state, or local) does not impose:

An excise tax is often used to try to influence behavior.

The first income tax on individuals after the ratification of the Sixteenth Amendment to the Constitution) levied tax rates from a low of 2% to a high of 6%.

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

Upon audit by the IRS, Faith is assessed a deficiency of $40,000 of which $25,000 is attributable to negligence. The 20% negligence penalty will apply to $25,000.

Which, if any, is not one of Adam Smith's canons principles) of taxation?

The IRS agent auditing the return will issue an RAR even if the taxpayer owes no additional taxes.

The ad valorem tax on personal use personalty is more often avoided by taxpayers than the ad valorem tax on business use personalty.

Working With the Tax Law

Tax Formula and Tax Determination an Overview of Property Transactions

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Filters