Question 1

Which provision could best be justified as encouraging small business?

Accepted Answer

A)  Ordinary loss allowed on § 1244 stock. 
B)  Percentage depletion. 
C)  Charitable contributions deduction. 
D)  Interest deduction on home mortgage. 
E)  None of these. 
A)  Ordinary loss allowed on § 1244 stock. 
B)  Percentage depletion. 
C)  Charitable contributions deduction. 
D)  Interest deduction on home mortgage. 
E)  None of these.

Question 2

The annual gift tax exclusion in 2019 is $15,000.

Accepted Answer

A) True 
 B)False

Question 3

The Federal income tax law allows a taxpayer to claim a deduction for state and local income taxes but limits all state taxes to a maximum of $10,000.

Accepted Answer

A) True 
 B)False

Question 4

Federal tax legislation generally originates in what committee?

Accepted Answer

A)  House Budget Committee. 
B)  Senate Finance Committee. 
C)  House Ways and Means Committee. 
D)  House Taxation Committee. 
E)  None of these. 
A)  House Budget Committee. 
B)  Senate Finance Committee. 
C)  House Ways and Means Committee. 
D)  House Taxation Committee. 
E)  None of these.

Question 5

Revenue Procedures deal with the internal management practices and procedures of the IRS.

Accepted Answer

A) True 
 B)False

Question 6

The like-kind tax free exchange treatment is an example of the wherewithal to pay concept.

Accepted Answer

A) True 
 B)False

Question 7

Douglas and Sue, related parties, are landlord and tenant as to certain business property. If the IRS questions the amount of rent Sue is paying to Douglas, this is an illustration of the:

Accepted Answer

A)  Arm's length concept. 
B)  Continuity of interest concept. 
C)  Tax benefit rule. 
D)  Substance over form concept. 
E)  None of these. 
A)  Arm's length concept. 
B)  Continuity of interest concept. 
C)  Tax benefit rule. 
D)  Substance over form concept. 
E)  None of these.

Question 8

The Golsen rule no longer applies to the U.S. Tax Court.

Accepted Answer

A) True 
 B)False

Question 9

Which trial court normally has 16 judges?

Accepted Answer

A)  U.S. Tax Court. 
B)  U.S. Court of Federal Claims. 
C)  U.S. Supreme Court. 
D)  U.S. Court of Appeals. 
E)  None of these. 
A)  U.S. Tax Court. 
B)  U.S. Court of Federal Claims. 
C)  U.S. Supreme Court. 
D)  U.S. Court of Appeals. 
E)  None of these.

Question 10

Complete avoidance of a capital gain tax occurs when the owner of appreciated property transfers it by death.

Accepted Answer

A) True 
 B)False

Question 11

Longer class lives for depreciable property and the required use of the straight-line method of depreciation would likely dampen the tax incentive for purchasing capital assets.

Accepted Answer

A) True 
 B)False

Question 12

Which provision is not justified by social considerations?

Accepted Answer

A)  Refundable earned income credit. 
B)  Adoption tax credit. 
C)  Like-kind exchange treatment. 
D)  Disallowance of illegal kickbacks. 
E)  None of these. 
A)  Refundable earned income credit. 
B)  Adoption tax credit. 
C)  Like-kind exchange treatment. 
D)  Disallowance of illegal kickbacks. 
E)  None of these.

Question 13

Which provision could best be justified as a means of controlling the economy?

Accepted Answer

A)  Write-off of research and development expenditures. 
B)  The § 179 immediate expensing of depreciable capital expenditures. 
C)  Amortization of pollution control facilities. 
D)  The rehabilitation tax credit. 
E)  None of these. 
A)  Write-off of research and development expenditures. 
B)  The § 179 immediate expensing of depreciable capital expenditures. 
C)  Amortization of pollution control facilities. 
D)  The rehabilitation tax credit. 
E)  None of these.

Question 14

The favorable treatment of research and development expenses is one means of controlling the economy.

Accepted Answer

A) True 
 B)False

Question 15

In a U.S. District Court, a jury can decide both questions of fact and questions of law.

Accepted Answer

A) True 
 B)False

Question 16

A Technical Advice Memorandum is issued by:

Accepted Answer

A)  Treasury Department. 
B)  National Office of the IRS. 
C)  Office of Chief Council. 
D)  Area Director. 
E)  None of these. 
A)  Treasury Department. 
B)  National Office of the IRS. 
C)  Office of Chief Council. 
D)  Area Director. 
E)  None of these.

Question 17

Letter rulings are issued by the National Office of the IRS.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements about an acquiescence is correct?

Accepted Answer

A)  An acquiescence is issued in the Federal Register. 
B)  Acquiescences are published only for certain regular decisions of the U.S. Tax Court. 
C)  An acquiescence is published in the Internal Revenue Bulletin. 
D)  The IRS does not issue acquiescences to adverse decisions that are not appealed. 
E)  All of these are correct. 
A)  An acquiescence is issued in the Federal Register. 
B)  Acquiescences are published only for certain regular decisions of the U.S. Tax Court. 
C)  An acquiescence is published in the Internal Revenue Bulletin. 
D)  The IRS does not issue acquiescences to adverse decisions that are not appealed. 
E)  All of these are correct.

Question 19

One of the justifications for the enactment of the tax law governing corporate reorganizations was the economic benefit it would provide businesses including making them more efficient).

Accepted Answer

A) True 
 B)False

Question 20

How does a treaty with a foreign country impact a section in the Internal Revenue Code?

Accepted Answer

The United States enters into tax treati

Which provision could best be justified as encouraging small business?

The annual gift tax exclusion in 2019 is $15,000.

The Federal income tax law allows a taxpayer to claim a deduction for state and local income taxes but limits all state taxes to a maximum of $10,000.

Federal tax legislation generally originates in what committee?

Revenue Procedures deal with the internal management practices and procedures of the IRS.

The like-kind tax free exchange treatment is an example of the wherewithal to pay concept.

Douglas and Sue, related parties, are landlord and tenant as to certain business property. If the IRS questions the amount of rent Sue is paying to Douglas, this is an illustration of the:

The Golsen rule no longer applies to the U.S. Tax Court.

Which trial court normally has 16 judges?

Complete avoidance of a capital gain tax occurs when the owner of appreciated property transfers it by death.

Longer class lives for depreciable property and the required use of the straight-line method of depreciation would likely dampen the tax incentive for purchasing capital assets.

Which provision is not justified by social considerations?

Which provision could best be justified as a means of controlling the economy?

The favorable treatment of research and development expenses is one means of controlling the economy.

In a U.S. District Court, a jury can decide both questions of fact and questions of law.

A Technical Advice Memorandum is issued by:

Letter rulings are issued by the National Office of the IRS.

Which of the following statements about an acquiescence is correct?

One of the justifications for the enactment of the tax law governing corporate reorganizations was the economic benefit it would provide businesses including making them more efficient).

How does a treaty with a foreign country impact a section in the Internal Revenue Code?

The Deduction for Qualified Business Income for Pass-Through Entities

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Earnings and Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, Operations, and Basis

Partnerships: Distributions, Transfer of Interests, and Terminations

S Corporations

Comparative Forms of Doing Business

Taxes on the Financial Statements

Exempt Entities

Multistate Corporate Taxation

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

Exam 1: Understanding and Working With the Federal Tax Law

Which provision could best be justified as encouraging small business?

The annual gift tax exclusion in 2019 is $15,000.

The Federal income tax law allows a taxpayer to claim a deduction for state and local income taxes but limits all state taxes to a maximum of $10,000.

Federal tax legislation generally originates in what committee?

Revenue Procedures deal with the internal management practices and procedures of the IRS.

The like-kind tax free exchange treatment is an example of the wherewithal to pay concept.

Douglas and Sue, related parties, are landlord and tenant as to certain business property. If the IRS questions the amount of rent Sue is paying to Douglas, this is an illustration of the:

The Golsen rule no longer applies to the U.S. Tax Court.

Which trial court normally has 16 judges?

Complete avoidance of a capital gain tax occurs when the owner of appreciated property transfers it by death.

Longer class lives for depreciable property and the required use of the straight-line method of depreciation would likely dampen the tax incentive for purchasing capital assets.

Which provision is not justified by social considerations?

Which provision could best be justified as a means of controlling the economy?

The favorable treatment of research and development expenses is one means of controlling the economy.

In a U.S. District Court, a jury can decide both questions of fact and questions of law.

A Technical Advice Memorandum is issued by:

Letter rulings are issued by the National Office of the IRS.

Which of the following statements about an acquiescence is correct?

One of the justifications for the enactment of the tax law governing corporate reorganizations was the economic benefit it would provide businesses including making them more efficient).

How does a treaty with a foreign country impact a section in the Internal Revenue Code?

The Deduction for Qualified Business Income for Pass-Through Entities

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Earnings and Profits and Dividend Distributions

Corporations: Redemptions and Liquidations

Corporations: Reorganizations

Consolidated Tax Returns

Taxation of International Transactions

Partnerships: Formation, Operations, and Basis

Partnerships: Distributions, Transfer of Interests, and Terminations

S Corporations

Comparative Forms of Doing Business

Taxes on the Financial Statements

Exempt Entities

Multistate Corporate Taxation

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Family Tax Planning

Income Taxation of Trusts and Estates

Filters