Question 1

The Federal excise tax on cigarettes is an example of a proportional tax.

Accepted Answer

A) True 
 B)False

Question 2

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 3

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 4

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 5

If a taxpayer files early (i.e. ,before the due date of the return),the statute of limitations on assessments begins on the date the return is filed.

Accepted Answer

A) True 
 B)False

Question 6

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 2015.In reviewing her 2014 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 7

For individual taxpayers,the interest rate for income tax refunds (overpayments) is the same as that applicable to assessments (underpayments).

Accepted Answer

A) True 
 B)False

Question 8

Match the statements that relate to each other.Note: Some choices may be used more than once.
a.3 years from date return is filed
b.3 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.6 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 bribe to the local sheriff,although business related,is not deductible.

Accepted Answer

The answer of Match the statements that relate to each...

Question 9

Like the Federal counterpart,the amount of the state excise taxes on gasoline varies from state to state.

Accepted Answer

A) True 
 B)False

Question 10

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 11

Which,if any,of the following provisions cannot be justified as mitigating the effect of the annual accounting period concept?

Accepted Answer

A) Nonrecognition of gain allowed for involuntary conversions. 
B) Net operating loss carryback and carryover provisions. 
C) Carry over of excess charitable contributions. 
D) Use of the installment method to recognize gain. 
E) Carry over of excess capital losses. 
A) Nonrecognition of gain allowed for involuntary conversions. 
B) Net operating loss carryback and carryover provisions. 
C) Carry over of excess charitable contributions. 
D) Use of the installment method to recognize gain. 
E) Carry over of excess capital losses.

Question 12

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 13

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.

Accepted Answer

A) True 
 B)False

Question 14

Which,if any,of the following provisions of the tax law cannot be justified as promoting administrative feasibility (simplifying the task of the IRS)?

Accepted Answer

A) Penalties are imposed for failure to file a return or pay a tax on time. 
B) Prepaid income is taxed in the year received and not in the year earned. 
C) Annual adjustments for indexation increases the amount of the standard deduction allowed. 
D) Casualty losses must exceed 10% of AGI to be deductible. 
E) A deduction is allowed for charitable contributions. 
A) Penalties are imposed for failure to file a return or pay a tax on time. 
B) Prepaid income is taxed in the year received and not in the year earned. 
C) Annual adjustments for indexation increases the amount of the standard deduction allowed. 
D) Casualty losses must exceed 10% of AGI to be deductible. 
E) A deduction is allowed for charitable contributions.

The Federal excise tax on cigarettes is an example of a proportional tax.

A characteristic of FUTA is that:

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

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

If a taxpayer files early (i.e. ,before the due date of the return),the statute of limitations on assessments begins on the date the return is filed.

For individual taxpayers,the interest rate for income tax refunds (overpayments) is the same as that applicable to assessments (underpayments).

Like the Federal counterpart,the amount of the state excise taxes on gasoline varies from state to state.

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%.

Which,if any,of the following provisions cannot be justified as mitigating the effect of the annual accounting period concept?

State income taxes generally can be characterized by:

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 provisions of the tax law cannot be justified as promoting administrative feasibility (simplifying the task of the IRS)?

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 Nontaxabl

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

Alternative Minimum Tax

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

Family Tax Planning

Income Taxation of Trusts and Estates

Filters

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

The Federal excise tax on cigarettes is an example of a proportional tax.

A characteristic of FUTA is that:

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

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

If a taxpayer files early (i.e. ,before the due date of the return),the statute of limitations on assessments begins on the date the return is filed.

For individual taxpayers,the interest rate for income tax refunds (overpayments) is the same as that applicable to assessments (underpayments).

Like the Federal counterpart,the amount of the state excise taxes on gasoline varies from state to state.

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%.

Which,if any,of the following provisions cannot be justified as mitigating the effect of the annual accounting period concept?

State income taxes generally can be characterized by:

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 provisions of the tax law cannot be justified as promoting administrative feasibility (simplifying the task of the IRS)?

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 Nontaxabl

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

Alternative Minimum Tax

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

Family Tax Planning

Income Taxation of Trusts and Estates

Filters