Question 1

When interest is charged on a deficiency, any part of a month counts as a full month.

Accepted Answer

A) True 
 B)False

Question 2

Due to population change, Goose Creek School District has decided to close one of its high schools. Since it has no further need of the property, the school is listed for sale. The two bids it receives are as follows: $\begin{array}{lr}
\text { United Methodist Church } & \$ 1,700,000 \
\text { Planet Motors } & 1,600,000
\end{array}$ The United Methodist Church would use the property to establish a sectarian middle school. Planet, a well-known car dealership, would revamp the property and operate it as a branch location.
If you were a member of the School District board, what factors would you consider in evaluating the two bids?

Accepted Answer

Although the bid from the United Methodi

Question 3

Several years ago, Logan purchased extra grazing land for his ranch at a cost of $240,000. In 2018, 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:
a. $210,000?
b. $360,000?
c. $630,000?
d. Why?

Accepted Answer

a. The full realized gain of $360,000 [$

Question 4

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 5

Melinda has been referred to you by one of your clients. In the past, she has prepared her own income tax returns, but she has become overwhelmed by the increased complexity of the tax law. Consequently, Melinda wants you to prepare her return for calendar year 2019. In reviewing her 2018 return, you note that she has claimed as a deduction the entire cost of a business building that should have been capitalized and depreciated. What course of action should you follow?

Accepted Answer

You should recommend to Melinda that an

Question 6

The tax law allows, under certain conditions, deferral of gain recognition for involuntary conversions.
a. By recognizing that the taxpayer's relative economic situation has not changed and that he or she lacks the wherewithal to pay a tax, any recognition of realized gain
a. What is the justification for this relief measure?
b. What happens if the proceeds are not entirely reinvested?

Accepted Answer

is deferred.
b. If the proceeds from an

Question 7

A rationale for the installment sale method tax rule is:

Accepted Answer

A)  Ability to pay. 
B)  Equity and fairness. 
C)  Simplicity. 
D)  Revenue neutrality. 
A)  Ability to pay. 
B)  Equity and fairness. 
C)  Simplicity. 
D)  Revenue neutrality.

Question 8

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

When interest is charged on a deficiency, any part of a month counts as a full month.

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?

A rationale for the installment sale method tax rule is:

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

Working With the Tax Law

Computing the Tax

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

Tax Credits and Payments

Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges

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

Taxing Business Income

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations

Partnerships

S Corporations

Exempt Entities

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Income Taxation of Trusts and Estates

Filters

Exam 1: Understanding and Working With the Federal Tax Law

When interest is charged on a deficiency, any part of a month counts as a full month.

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?

A rationale for the installment sale method tax rule is:

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

Working With the Tax Law

Computing the Tax

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

Tax Credits and Payments

Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges

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

Taxing Business Income

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations

Partnerships

S Corporations

Exempt Entities

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Income Taxation of Trusts and Estates

Filters