Question 1

A taxpayer's average tax rate is the tax rate applied to an incremental amount of taxable income that is added to the tax base.

Accepted Answer

A) True 
 B)False

Question 2

The primary liability for payment of the gift tax is imposed upon the donee.

Accepted Answer

A) True 
 B)False

Question 3

Leonard established a trust for the benefit of his son.The principal amount of the trust is $400,000.The trust is projected to earn approximately 5% per year.In the current year,the trust earned $20,000.Expenses of $4,000 were incurred.Assume that $14,000 is distributed to Leonard's son.
a.How much income is taxed to the trust?
b.How much income is taxed to Leonard's son?

Accepted Answer

a.$20,000 income - $4,000 expe

Question 4

The federal income tax is the dominant form of taxation by the federal government.

Accepted Answer

A) True 
 B)False

Question 5

In a limited liability partnership,a partner is not liable for his partner's acts of negligence or misconduct.

Accepted Answer

A) True 
 B)False

Question 6

The largest source of federal revenues is the corporate income tax.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following taxes is regressive?

Accepted Answer

A) Federal Insurance Contributions Act (FIC
A)  
B) excise tax 
C) property tax 
D) gift tax 
A) Federal Insurance Contributions Act (FIC
A)  
B) excise tax 
C) property tax 
D) gift tax

Question 8

The unified transfer tax system

Accepted Answer

A) imposes a single tax upon transfers of property during an individual's lifetime only. 
B) imposes a single tax upon transfers of property during an individual's life and at death. 
C) imposes a single tax upon transfers of property only at an individual's death. 
D) none of above. 
A) imposes a single tax upon transfers of property during an individual's lifetime only. 
B) imposes a single tax upon transfers of property during an individual's life and at death. 
C) imposes a single tax upon transfers of property only at an individual's death. 
D) none of above.

Question 9

Property is generally included on an estate tax return at its historical cost basis.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements is incorrect?

Accepted Answer

A) Property taxes are levied on real estate. 
B) Excise taxes are assessed on items such as gasoline and telephone use. 
C) Gift taxes are imposed on the recipient of a gift. 
D) The estate tax is based on the fair market value of property at death or the alternate valuation date. 
A) Property taxes are levied on real estate. 
B) Excise taxes are assessed on items such as gasoline and telephone use. 
C) Gift taxes are imposed on the recipient of a gift. 
D) The estate tax is based on the fair market value of property at death or the alternate valuation date.

Question 11

Jillian,a single individual,earns $230,000 in 2014 through her job as an accounting manager.What is her FICA tax?

Accepted Answer

A) $10,859 
B) $17,595 
C) $10,589 
D) $8,951 
A) $10,859 
B) $17,595 
C) $10,589 
D) $8,951

Question 12

Thomas dies in the current year and has a gross estate valued at $3,000,000.During his lifetime (but after 1976)Thomas had made taxable gifts of $400,000.The estate incurs funeral and administrative expenses of $100,000 and also pays off Thomas' debts which amount to $300,000.Thomas bequeaths $500,000 to his wife.What is the amount of Thomas' tax base,the amount on which the estate tax is computed?

Accepted Answer

A) $2,100,000 
B) $2,500,000 
C) $2,600,000 
D) $3,400,000 
A) $2,100,000 
B) $2,500,000 
C) $2,600,000 
D) $3,400,000

Question 13

What are the correct monthly rates for calculating failure to file and failure to pay penalties?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 14

Arthur pays tax of $5,000 on taxable income of $50,000 while taxpayer Barbara pays tax of $12,000 on $120,000.The tax is a

Accepted Answer

A) progressive tax. 
B) proportional tax. 
C) regressive tax. 
D) None of the above. 
A) progressive tax. 
B) proportional tax. 
C) regressive tax. 
D) None of the above.

Question 15

An individual will be subject to gift tax on gifts made to a charity greater than $14,000.

Accepted Answer

A) True 
 B)False

Question 16

Kate files her tax return 36 days after the due date.When she files the return,she sends a check for $2,000 which is the balance of the tax owed by her.Kate's penalty for failure to file a return will be

Accepted Answer

A) 0)5% per month (or factor thereof)up to a maximum of 25%. 
B) 5% per month (or factor thereof)up to a maximum of 25%. 
C) 20% per month (or factor thereof). 
D) 25%. 
A) 0)5% per month (or factor thereof)up to a maximum of 25%. 
B) 5% per month (or factor thereof)up to a maximum of 25%. 
C) 20% per month (or factor thereof). 
D) 25%.

Question 17

All of the following are classified as flow-through entities for tax purposes except

Accepted Answer

A) partnerships. 
B) C corporations. 
C) S corporations. 
D) limited liability companies. 
A) partnerships. 
B) C corporations. 
C) S corporations. 
D) limited liability companies.

Question 18

What is an important aspect of a limited liability partnership?

Accepted Answer

A) It is the same as a limited partnership where the general partner has unlimited liability. 
B) A partner has unlimited liability arising from his or her own acts of negligence or misconduct or similar acts of any person under his or her direct supervision,but does not have unlimited liability in other matters. 
C) All partners have limited liability regarding all partnership activities. 
D) All partners have unlimited liability. 
A) It is the same as a limited partnership where the general partner has unlimited liability. 
B) A partner has unlimited liability arising from his or her own acts of negligence or misconduct or similar acts of any person under his or her direct supervision,but does not have unlimited liability in other matters. 
C) All partners have limited liability regarding all partnership activities. 
D) All partners have unlimited liability.

Question 19

Generally,the statute of limitations is three years from the later of the date the tax return is filed or the due date.

Accepted Answer

A) True 
 B)False

Question 20

Limited liability company members (owners)are responsible for the liabilities of their limited liability company.

Accepted Answer

A) True 
 B)False

Exam 2 an Introduction to Taxation

A taxpayer's average tax rate is the tax rate applied to an incremental amount of taxable income that is added to the tax base.

The primary liability for payment of the gift tax is imposed upon the donee.

The federal income tax is the dominant form of taxation by the federal government.

In a limited liability partnership,a partner is not liable for his partner's acts of negligence or misconduct.

The largest source of federal revenues is the corporate income tax.

Which of the following taxes is regressive?

The unified transfer tax system

Property is generally included on an estate tax return at its historical cost basis.

Which of the following statements is incorrect?

Jillian,a single individual,earns $230,000 in 2014 through her job as an accounting manager.What is her FICA tax?

What are the correct monthly rates for calculating failure to file and failure to pay penalties?

Arthur pays tax of $5,000 on taxable income of $50,000 while taxpayer Barbara pays tax of $12,000 on $120,000.The tax is a

An individual will be subject to gift tax on gifts made to a charity greater than $14,000.

Kate files her tax return 36 days after the due date.When she files the return,she sends a check for $2,000 which is the balance of the tax owed by her.Kate's penalty for failure to file a return will be

All of the following are classified as flow-through entities for tax purposes except

What is an important aspect of a limited liability partnership?

Generally,the statute of limitations is three years from the later of the date the tax return is filed or the due date.

Limited liability company members (owners)are responsible for the liabilities of their limited liability company.

Tax Research

Corporate Formations and Capital Structure

I: Determination of Tax

The Corporate Income Tax

Gross Income: Inclusions

Corporate Nonliquidating Distributions

Gross Income: Exclusions

Other Corporate Tax Levies

Property Transactions: Capital Gains and Losses

Corporate Liquidating Distributions

Deductions and Losses

Corporate Acquisitions and Reorganizations

Itemized Deductions

Consolidated Tax Returns

Losses and Bad Debts

Partnership Formation and Operation

Employee Expenses and Deferred Compensation

Special Partnership Issues

Depreciation cost Recovery amortization and Depletion

S Corporations

Accounting Periods and Methods

The Gift Tax

Property Transactions: Nontaxable Exchanges

The Estate Tax

Property Transactions: Section 1231 and Recapture

Income Taxation of Trusts and Estates

Special Tax Computation Methods, tax Credits, and Payment of Tax

Administrative Procedures

Filters