Question 1

Horizontal equity means that

Accepted Answer

A) taxpayers with the same amount of income pay the same amount of tax. 
B) taxpayers with larger amounts of income should pay more tax than taxpayer's with lower amounts of income. 
C) all taxpayers should pay the same tax. 
D) none of the above. 
A) taxpayers with the same amount of income pay the same amount of tax. 
B) taxpayers with larger amounts of income should pay more tax than taxpayer's with lower amounts of income. 
C) all taxpayers should pay the same tax. 
D) none of the above.

Question 2

Mia is self-employed as a consultant.During 2013,Mia earned $180,000 in self-employment income.What is Mia's self-employment tax?

Accepted Answer

The answer of Mia is self-employed as a consultant.During 2013,Mia...

Question 3

Denzel earns $130,000 in 2014 through his job as a sales manager.What is his FICA tax?

Accepted Answer

A) $9,139 
B) $8,951 
C) $8,698 
D) $9,945 
A) $9,139 
B) $8,951 
C) $8,698 
D) $9,945

Question 4

A progressive tax rate structure is one where the rate of tax increases as the tax base increases.

Accepted Answer

A) True 
 B)False

Question 5

The tax law encompasses administrative and judicial interpretations,such as Treasury regulations,revenue rulings,revenue procedures,and court decisions,as well as statutes.

Accepted Answer

A) True 
 B)False

Question 6

Frederick failed to file his 2014 tax return on a timely basis.In fact,he filed his 2014 income tax return on October 31,2015,(the due date was April 15,2015)and paid the amount due at that time.He failed to make timely extensions.Below are amounts from his 2014 return:
   Frederick sent a check for $1,776 in payment of his liability.He thinks that he has met all of his financial obligations to the government for 2014.For what additional amounts may Frederick be liable assuming any applicable interest rate is 6%?

Accepted Answer

Since Frederick's return is filed late a

Question 7

A proportional tax rate is one where the rate of the tax is the same for all taxpayers,regardless of income levels.

Accepted Answer

A) True 
 B)False

Question 8

Rocky and Charlie form RC Partnership as equal partners.Rocky contributes $100,000 into RC while Charlie contributes real estate with a fair market value of $100,000.During the current year,RC earned net income of $600,000.The partnership distributes $200,000 to each partner.The amount that Rocky should report on his individual tax return is

Accepted Answer

A) $0. 
B) $100,000. 
C) $200,000. 
D) $300,000. 
A) $0. 
B) $100,000. 
C) $200,000. 
D) $300,000.

Question 9

Which of the following is not one of Adam Smith's canons of taxation?

Accepted Answer

A) equity 
B) convenience 
C) certainty 
D) paid by all citizens 
A) equity 
B) convenience 
C) certainty 
D) paid by all citizens

Question 10

The IRS must pay interest on

Accepted Answer

A) all tax refunds. 
B) tax refunds paid later than 30 days after the due date. 
C) tax refunds paid later than 45 days after the due date. 
D) The IRS never pays interest on tax refunds. 
A) all tax refunds. 
B) tax refunds paid later than 30 days after the due date. 
C) tax refunds paid later than 45 days after the due date. 
D) The IRS never pays interest on tax refunds.

Question 11

Which of the following is not a taxpaying entity?

Accepted Answer

A) Corporation 
B) Partnership 
C) Individual 
D) All of the above are taxpayers. 
A) Corporation 
B) Partnership 
C) Individual 
D) All of the above are taxpayers.

Question 12

During the current tax year,Frank Corporation generated gross income of $1,900,000 and had ordinary and necessary deductions of $1,400,000.What is the amount of Frank Corporation's corporate income tax for the year?

Accepted Answer

Taxable income is $1,900,000 -

Question 13

Describe the steps in the legislative process for major tax reform.

Accepted Answer

1.Treasury studies are prepared on neede

Question 14

Regressive tax rates decrease as the tax base increases.

Accepted Answer

A) True 
 B)False

Question 15

Peyton has adjusted gross income of $20,000,000 on his 2014 tax return,filed April 15,2015.He accidentally failed to include $200,000 that he received for a television advertisement.How long does the IRS have to audit Peyton's federal tax return?

Accepted Answer

A) until April 15,2017 
B) until April 15,2018 
C) until April 15,2021 
D) The IRS can audit Peyton's return at any future date. 
A) until April 15,2017 
B) until April 15,2018 
C) until April 15,2021 
D) The IRS can audit Peyton's return at any future date.

Question 16

Individuals are the principal taxpaying entities in the federal income tax system.

Accepted Answer

A) True 
 B)False

Question 17

Doug and Frank form a partnership,D and F Advertising,each contributing $50,000 to start the business.During the first year of operations,D and F earns $80,000,which is allocated $40,000 each to Doug and Frank.At the beginning of the second year,Doug sells his interest to Marcus for $90,000.What is the amount of Doug's taxable gain on the sale?

Accepted Answer

There is n

Question 18

If a taxpayer's total tax liability is $30,000,taxable income is $100,000,and economic income is $120,000,the average tax rate is 30 percent.

Accepted Answer

A) True 
 B)False

Question 19

Adam Smith's canons of taxation are equity,certainty,convenience and economy.

Accepted Answer

A) True 
 B)False

Question 20

All of the following statements are true except

Accepted Answer

A) the net income earned by a sole proprietorship is reported on the owner's individual income tax return. 
B) the net income of an S corporation is subject to double taxation because it is taxed at the entity level and dividends paid from the S corporation to individual shareholders are also taxed. 
C) the net income of C corporation is subject to double taxation because it is taxed at the entity level and dividends paid from the C corporation to individual shareholders is also taxed. 
D) LLCs are generally taxed as partnerships. 
A) the net income earned by a sole proprietorship is reported on the owner's individual income tax return. 
B) the net income of an S corporation is subject to double taxation because it is taxed at the entity level and dividends paid from the S corporation to individual shareholders are also taxed. 
C) the net income of C corporation is subject to double taxation because it is taxed at the entity level and dividends paid from the C corporation to individual shareholders is also taxed. 
D) LLCs are generally taxed as partnerships.

Exam 2 an Introduction to Taxation

Horizontal equity means that

Mia is self-employed as a consultant.During 2013,Mia earned $180,000 in self-employment income.What is Mia's self-employment tax?

Denzel earns $130,000 in 2014 through his job as a sales manager.What is his FICA tax?

A progressive tax rate structure is one where the rate of tax increases as the tax base increases.

The tax law encompasses administrative and judicial interpretations,such as Treasury regulations,revenue rulings,revenue procedures,and court decisions,as well as statutes.

A proportional tax rate is one where the rate of the tax is the same for all taxpayers,regardless of income levels.

Which of the following is not one of Adam Smith's canons of taxation?

The IRS must pay interest on

Which of the following is not a taxpaying entity?

During the current tax year,Frank Corporation generated gross income of $1,900,000 and had ordinary and necessary deductions of $1,400,000.What is the amount of Frank Corporation's corporate income tax for the year?

Describe the steps in the legislative process for major tax reform.

Regressive tax rates decrease as the tax base increases.

Peyton has adjusted gross income of $20,000,000 on his 2014 tax return,filed April 15,2015.He accidentally failed to include $200,000 that he received for a television advertisement.How long does the IRS have to audit Peyton's federal tax return?

Individuals are the principal taxpaying entities in the federal income tax system.

If a taxpayer's total tax liability is $30,000,taxable income is $100,000,and economic income is $120,000,the average tax rate is 30 percent.

Adam Smith's canons of taxation are equity,certainty,convenience and economy.

All of the following statements are true except

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