Question 1

One of the motivations for making a gift is to save on income taxes.

Accepted Answer

A) True 
 B)False

Question 2

Match the statements that relate to each other.Note: Some choices may be used more than once.
-Interest due on refund

Accepted Answer

A) Three years from date return is filed 
B) Three years from due date of return 
C) 20% of underpayment 
D) 5% per month (25% limit) 
E) 0.5% per month (25% limit)
F)Conducted at IRS office
G)Conducted at taxpayer's office
H)Six years
I)45-day grace period allowed to IRS
J)No statute of limitations (period remains open)
K)75% of underpayment
L)No correct match provided 
A) Three years from date return is filed 
B) Three years from due date of return 
C) 20% of underpayment 
D) 5% per month (25% limit) 
E) 0.5% per month (25% limit)
F)Conducted at IRS office
G)Conducted at taxpayer's office
H)Six years
I)45-day grace period allowed to IRS
J)No statute of limitations (period remains open)
K)75% of underpayment
L)No correct match provided

Question 3

Which, if any, of the following taxes are proportional (rather than progressive)?

Accepted Answer

A) State general sales tax 
B) Federal individual income tax 
C) Federal estate tax 
D) Federal gift tax 
E) All of these 
A) State general sales tax 
B) Federal individual income tax 
C) Federal estate tax 
D) Federal gift tax 
E) All of these

Question 4

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 these. 
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 these.

Question 5

A VAT (value added tax):

Accepted Answer

A) Is regressive in its effect. 
B) Has not proved popular outside of the United States. 
C) Is not a tax on consumption. 
D) Is used exclusively by third world (less developed) countries. 
E) None of these. 
A) Is regressive in its effect. 
B) Has not proved popular outside of the United States. 
C) Is not a tax on consumption. 
D) Is used exclusively by third world (less developed) countries. 
E) None of these.

Question 6

Using the following choices, show the justification for each provision of the tax law listed.
a. Economic considerations 
b. Social considerations
c. Equity considerations 
d. Both a. and b.
-"Pay as you go" (paygo)

Accepted Answer

A) Deferral of gains from involuntary conversions 
B) Carryforward of net operating losses 
C) "No change" is a possible result 
D) State income tax applied to a visiting nonresident 
E) IRS special agent
F)Undoing the "piggyback" result
G)Ideal budget goal as to new tax legislation
H)Every state that has a general sales tax has one
I)Imposed by all states and the Federal government
J)Imposed by some states but not the Federal government
K)Imposed only by the Federal government
L)No correct match provided 
A) Deferral of gains from involuntary conversions 
B) Carryforward of net operating losses 
C) "No change" is a possible result 
D) State income tax applied to a visiting nonresident 
E) IRS special agent
F)Undoing the "piggyback" result
G)Ideal budget goal as to new tax legislation
H)Every state that has a general sales tax has one
I)Imposed by all states and the Federal government
J)Imposed by some states but not the Federal government
K)Imposed only by the Federal government
L)No correct match provided

Question 7

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

Accepted Answer

A) A tax holiday is granted to an out-of-state business that is searching for a new factory site. 
B) An abandoned church is converted to a restaurant. 
C) A public school is razed and turned into a city park. 
D) A local university sells a dormitory that will be converted for use as an apartment building. 
E) None of these. 
A) A tax holiday is granted to an out-of-state business that is searching for a new factory site. 
B) An abandoned church is converted to a restaurant. 
C) A public school is razed and turned into a city park. 
D) A local university sells a dormitory that will be converted for use as an apartment building. 
E) None of these.

Question 8

During any month in which both the failure to file penalty and the failure to pay penalty apply, the failure to file penalty is increased by the amount of the failure to pay penalty.

Accepted Answer

A) True 
 B)False

Question 9

If a special agent becomes involved in the audit of a return, this indicates that the IRS suspects that fraud is involved.

Accepted Answer

A) True 
 B)False

Question 10

Two years ago, State Y enacted a new income tax credit for college prep materials.The credit is available to individuals and is equal to 40% of the cost of the items.The credit may not exceed $50 in any year.State Y's director of finance has discovered this year that the amount of credit claimed is far higher than expected.Which principle of good tax policy might not have been considered in designing this tax that caused the original cost estimate to be too low?

Accepted Answer

A) Equity. 
B) Simplicity. 
C) Economy in collection. 
D) Minimum tax gap. 
A) Equity. 
B) Simplicity. 
C) Economy in collection. 
D) Minimum tax gap.

Question 11

There is a Federal excise tax on hotel occupancy.

Accepted Answer

A) True 
 B)False

Question 12

The Federal estate and gift taxes are examples of progressive taxes.

Accepted Answer

A) True 
 B)False

Question 13

Burt and Lisa are married and live in a common law state.Burt wants to make gifts to their four children in 2019. What is the maximum amount of the annual exclusion they will be allowed for these gifts?

Accepted Answer

A) $15,000. 
B) $30,000. 
C) $60,000. 
D) $120,000. 
E) None of these. 
A) $15,000. 
B) $30,000. 
C) $60,000. 
D) $120,000. 
E) None of these.

Question 14

Allowing a tax credit for certain solar energy property can be justified:

Accepted Answer

A) As helping small businesses. 
B) As promoting administrative feasibility. 
C) As promoting a government policy to use alternative energy sources. 
D) Based on the wherewithal to pay concept. 
E) None of these. 
A) As helping small businesses. 
B) As promoting administrative feasibility. 
C) As promoting a government policy to use alternative energy sources. 
D) Based on the wherewithal to pay concept. 
E) None of these.

Question 15

Match the statements that relate to each other.Note: Some choices may be used more than once.
-Failure to pay penalty

Accepted Answer

A) Three years from date return is filed 
B) Three years from due date of return 
C) 20% of underpayment 
D) 5% per month (25% limit) 
E) 0.5% per month (25% limit)
F)Conducted at IRS office
G)Conducted at taxpayer's office
H)Six years
I)45-day grace period allowed to IRS
J)No statute of limitations (period remains open)
K)75% of underpayment
L)No correct match provided 
A) Three years from date return is filed 
B) Three years from due date of return 
C) 20% of underpayment 
D) 5% per month (25% limit) 
E) 0.5% per month (25% limit)
F)Conducted at IRS office
G)Conducted at taxpayer's office
H)Six years
I)45-day grace period allowed to IRS
J)No statute of limitations (period remains open)
K)75% of underpayment
L)No correct match provided

Question 16

Using the following choices, show the justification for each provision of the tax law listed.
a. Economic considerations 
b. Social considerations
c. Equity considerations 
d. Both a. and b.
-A bribe to the local sheriff, although business related, is not deductible.

Accepted Answer

A) Deferral of gains from involuntary conversions 
B) Carryforward of net operating losses 
C) "No change" is a possible result 
D) State income tax applied to a visiting nonresident 
E) IRS special agent
F)Undoing the "piggyback" result
G)Ideal budget goal as to new tax legislation
H)Every state that has a general sales tax has one
I)Imposed by all states and the Federal government
J)Imposed by some states but not the Federal government
K)Imposed only by the Federal government
L)No correct match provided 
A) Deferral of gains from involuntary conversions 
B) Carryforward of net operating losses 
C) "No change" is a possible result 
D) State income tax applied to a visiting nonresident 
E) IRS special agent
F)Undoing the "piggyback" result
G)Ideal budget goal as to new tax legislation
H)Every state that has a general sales tax has one
I)Imposed by all states and the Federal government
J)Imposed by some states but not the Federal government
K)Imposed only by the Federal government
L)No correct match provided

Question 17

When a state decouples from a Federal tax provision, it means that this provision will not apply for state income tax purposes.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following taxes is paid only by the employer?

Accepted Answer

A) FICA 
B) FUTA 
C) Social Security tax 
D) Medicare tax 
A) FICA 
B) FUTA 
C) Social Security tax 
D) Medicare tax

Question 19

A safe and easy way for a taxpayer to avoid local and state sales taxes is to make the purchase in a state that levies no such taxes.

Accepted Answer

A) True 
 B)False

Question 20

In preparing a tax return, all questions on the return must be answered.

Accepted Answer

A) True 
 B)False

One of the motivations for making a gift is to save on income taxes.

Match the statements that relate to each other.Note: Some choices may be used more than once. -Interest due on refund

Which, if any, of the following taxes are proportional (rather than progressive)?

Social considerations can be used to justify:

A VAT (value added tax):

Using the following choices, show the justification for each provision of the tax law listed. a. Economic considerations b. Social considerations c. Equity considerations d. Both a. and b. -"Pay as you go" (paygo)

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

During any month in which both the failure to file penalty and the failure to pay penalty apply, the failure to file penalty is increased by the amount of the failure to pay penalty.

If a special agent becomes involved in the audit of a return, this indicates that the IRS suspects that fraud is involved.

There is a Federal excise tax on hotel occupancy.

The Federal estate and gift taxes are examples of progressive taxes.

Burt and Lisa are married and live in a common law state.Burt wants to make gifts to their four children in 2019. What is the maximum amount of the annual exclusion they will be allowed for these gifts?

Allowing a tax credit for certain solar energy property can be justified:

Match the statements that relate to each other.Note: Some choices may be used more than once. -Failure to pay penalty

Using the following choices, show the justification for each provision of the tax law listed. a. Economic considerations b. Social considerations c. Equity considerations d. Both a. and b. -A bribe to the local sheriff, although business related, is not deductible.

When a state decouples from a Federal tax provision, it means that this provision will not apply for state income tax purposes.

Which of the following taxes is paid only by the employer?

A safe and easy way for a taxpayer to avoid local and state sales taxes is to make the purchase in a state that levies no such taxes.

In preparing a tax return, all questions on the return must be answered.

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 Basic Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: Section 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters

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

One of the motivations for making a gift is to save on income taxes.

Match the statements that relate to each other.Note: Some choices may be used more than once. -Interest due on refund

Which, if any, of the following taxes are proportional (rather than progressive)?

Social considerations can be used to justify:

A VAT (value added tax):

Using the following choices, show the justification for each provision of the tax law listed. a. Economic considerations b. Social considerations c. Equity considerations d. Both a. and b. -"Pay as you go" (paygo)

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

During any month in which both the failure to file penalty and the failure to pay penalty apply, the failure to file penalty is increased by the amount of the failure to pay penalty.

If a special agent becomes involved in the audit of a return, this indicates that the IRS suspects that fraud is involved.

There is a Federal excise tax on hotel occupancy.

The Federal estate and gift taxes are examples of progressive taxes.

Burt and Lisa are married and live in a common law state.Burt wants to make gifts to their four children in 2019. What is the maximum amount of the annual exclusion they will be allowed for these gifts?

Allowing a tax credit for certain solar energy property can be justified:

Match the statements that relate to each other.Note: Some choices may be used more than once. -Failure to pay penalty

Using the following choices, show the justification for each provision of the tax law listed. a. Economic considerations b. Social considerations c. Equity considerations d. Both a. and b. -A bribe to the local sheriff, although business related, is not deductible.

When a state decouples from a Federal tax provision, it means that this provision will not apply for state income tax purposes.

Which of the following taxes is paid only by the employer?

A safe and easy way for a taxpayer to avoid local and state sales taxes is to make the purchase in a state that levies no such taxes.

In preparing a tax return, all questions on the return must be answered.

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 Basic Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: Section 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters