Exam 1: Introduction to Taxation

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

Using the choices provided below, 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. -Tax brackets are increased for inflation.

What might cause an individual to owe income taxes in more than one state?

Congress reacts to judicial decisions that interpret the tax law in different ways.When it approves of a decision, Congress may act to amend the Code to incorporate the holding.When it disapproves, Congress may amend the Code to nullify its effect.Give an example of each one of these congressional reactions.

On transfers by death, the Federal government relies on an estate tax, while states impose an estate tax, an inheritance tax, both taxes, or neither tax.

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

A lack of compliance in the payment of use taxes can be resolved by several means.In this regard, comment on the f a.As reflected in Example 5, re-registration of a car purchased out of state is the o a.Registration of automobiles. b.Reporting of Internet purchases on state income tax returns.

Unlike FICA, FUTA requires that employers comply with state as well as Federal rules.

To mitigate the effect of the annual accounting period concept, the tax law permits the carryforward of excess charitable contributions of a particular year to other years.

Using the choices provided below, 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. -Additional depreciation deduction allowed for the year the asset is acquired.

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

One of the major reasons for the enactment of the Federal estate tax was to prevent large amounts of wealth from being accumulated within a family unit.

Indicate which, if any, statement is incorrect.State income taxes:

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

State income taxes generally can be characterized by:

Stealth taxes have the effect of generating additional taxes from all taxpayers.

Using the choices provided below, 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. -Tax credits available for the purchase of a vehicle that uses alternative (non-fossil) fuels.

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

Using the choices provided below, 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 deduction for contributions by an employee to certain retirement plans.

Using the choices provided below, 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 tax credit for amounts spent to furnish care for children while the parent is at work.