Question 1

Taxes not imposed by the Federal government include:

Accepted Answer

A) Tobacco excise tax. 
B) Customs duties (tariffs on imports). 
C) Tax on rental cars. 
D) Gas guzzler tax. 
E) None of these. 
A) Tobacco excise tax. 
B) Customs duties (tariffs on imports). 
C) Tax on rental cars. 
D) Gas guzzler tax. 
E) None of these.

Question 2

When interest is charged on a deficiency, any part of a month counts as a full month.

Accepted Answer

A) True 
 B)False

Question 3

Briana lives in one state and works in the adjoining state. Both states tax the income she earns from her job. Does Briana have any relief from this apparent double taxation of the same income?

Accepted Answer

Most states allow their residents some f

Question 4

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

Accepted Answer

A) A resident dies and leaves his farm to his church. 
B) A large property owner issues a conservation easement as to some of her land. 
C) A tax holiday issued 10 years ago has expired. 
D) A bankrupt motel is acquired by the Red Cross and is to be used to provide housing for homeless persons. 
E) None of these. 
A) A resident dies and leaves his farm to his church. 
B) A large property owner issues a conservation easement as to some of her land. 
C) A tax holiday issued 10 years ago has expired. 
D) A bankrupt motel is acquired by the Red Cross and is to be used to provide housing for homeless persons. 
E) None of these.

Question 5

Which of the following is a characteristic of the audit process?

Accepted Answer

A) Most taxpayer audits involve "special" agents. 
B) Self-employed taxpayers are less likely to be selected for audit than employed taxpayers. 
C) Less important issues are handled by means of a correspondence audit. 
D) If a taxpayer disagrees with the IRS auditor's finding, the only resort is to the courts. 
E) None of these. 
A) Most taxpayer audits involve "special" agents. 
B) Self-employed taxpayers are less likely to be selected for audit than employed taxpayers. 
C) Less important issues are handled by means of a correspondence audit. 
D) If a taxpayer disagrees with the IRS auditor's finding, the only resort is to the courts. 
E) None of these.

Question 6

One of the motivations for making a gift is to save on income taxes.

Accepted Answer

A) True 
 B)False

Question 7

A landlord leases property upon which the tenant makes improvements. The improvements are significant and are not made in lieu of rent. At the end of the lease, the value of the improvements are not income to the landlord. This rule is an example of:

Accepted Answer

A) A clear reflection of income result. 
B) The tax benefit rule. 
C) The arm's length concept. 
D) The wherewithal to pay concept. 
E) None of these. 
A) A clear reflection of income result. 
B) The tax benefit rule. 
C) The arm's length concept. 
D) The wherewithal to pay concept. 
E) None of these.

Question 8

In 2015, Deborah became 65 years old. In 2016 she added a swimming pool, and in 2017 she converted the residence to rental property and moved into an assisted living facility. Since 2014, Deborah's ad valorem property taxes have decreased once and increased twice. Explain.

Accepted Answer

The decrease probably came in 2015 when

Question 9

The tax law contains various tax credits, deductions, and exclusions that are designed to encourage taxpayers to obtain additional education. On what grounds can these provisions be justified?

Accepted Answer

Social and economic considerat

Question 10

On occasion, Congress has to enact legislation that clarifies the tax law in order to change a result reached by the U.S. Supreme Court.

Accepted Answer

A) True 
 B)False

Question 11

In preparing a tax return, all questions on the return must be answered.

Accepted Answer

A) True 
 B)False

Question 12

For omissions from gross income in excess of 25% of that reported, there is no statute of limitations on additional income tax assessments by the IRS.

Accepted Answer

A) True 
 B)False

Question 13

The formula for the Federal income tax on corporations is the same as that applicable to individuals.

Accepted Answer

A) True 
 B)False

Question 14

Brayden files his Federal income tax return by April 15, but does not pay the tax. Although he expects to pay interest on the large amount of tax he still owes, he feels that the timely filing has avoided any penalties. Is Brayden's assumption correct?

Accepted Answer

Although Brayden has avoided t

Question 15

Rick, the sole proprietor of an adult entertainment club, is audited by the IRS. On the third day of the field audit, the regular IRS agent is accompanied by a special agent. Should Rick be concerned by this new development? Explain.

Accepted Answer

Yes, he should. Special agents rarely ap

Question 16

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 for home improvements that conserve energy.

Accepted Answer

The answer of Using the choices provided below, show the...

Question 17

The Federal income tax is based on a pay-as-you-go system and has become a "mass tax." Explain this statement.

Accepted Answer

The pay-as-you-go system is present in t

Question 18

For state income tax purposes, a majority of states allow a deduction for Federal income taxes.

Accepted Answer

A) True 
 B)False

Question 19

The Federal income tax on individuals generates more revenue than the Federal income tax on corporations.

Accepted Answer

A) True 
 B)False

Question 20

In 1986, Roy leased real estate to Drab Corporation for 20 years. Drab Corporation made significant capital improvements to the property. In 2006, Drab decides not to renew the lease and vacates the property. At that time, the value of the improvements is $800,000. Roy sells the real estate in 2017 for $1,200,000 of which $900,000 is attributable to the improvements. When is Roy taxed on the improvements made by Drab Corporation?

Accepted Answer

Roy is not subject to taxation on the im

Taxes not imposed by the Federal government include:

When interest is charged on a deficiency, any part of a month counts as a full month.

Briana lives in one state and works in the adjoining state. Both states tax the income she earns from her job. Does Briana have any relief from this apparent double taxation of the same income?

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

Which of the following is a characteristic of the audit process?

One of the motivations for making a gift is to save on income taxes.

A landlord leases property upon which the tenant makes improvements. The improvements are significant and are not made in lieu of rent. At the end of the lease, the value of the improvements are not income to the landlord. This rule is an example of:

In 2015, Deborah became 65 years old. In 2016 she added a swimming pool, and in 2017 she converted the residence to rental property and moved into an assisted living facility. Since 2014, Deborah's ad valorem property taxes have decreased once and increased twice. Explain.

The tax law contains various tax credits, deductions, and exclusions that are designed to encourage taxpayers to obtain additional education. On what grounds can these provisions be justified?

On occasion, Congress has to enact legislation that clarifies the tax law in order to change a result reached by the U.S. Supreme Court.

In preparing a tax return, all questions on the return must be answered.

For omissions from gross income in excess of 25% of that reported, there is no statute of limitations on additional income tax assessments by the IRS.

The formula for the Federal income tax on corporations is the same as that applicable to individuals.

Brayden files his Federal income tax return by April 15, but does not pay the tax. Although he expects to pay interest on the large amount of tax he still owes, he feels that the timely filing has avoided any penalties. Is Brayden's assumption correct?

Rick, the sole proprietor of an adult entertainment club, is audited by the IRS. On the third day of the field audit, the regular IRS agent is accompanied by a special agent. Should Rick be concerned by this new development? Explain.

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 for home improvements that conserve energy.

The Federal income tax is based on a pay-as-you-go system and has become a "mass tax." Explain this statement.

For state income tax purposes, a majority of states allow a deduction for Federal income taxes.

The Federal income tax on individuals generates more revenue than the Federal income tax on corporations.

Working With the Tax Law

Tax Formula and Tax Determination; an Overview of Property Transactions

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

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters

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

Taxes not imposed by the Federal government include:

When interest is charged on a deficiency, any part of a month counts as a full month.

Briana lives in one state and works in the adjoining state. Both states tax the income she earns from her job. Does Briana have any relief from this apparent double taxation of the same income?

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

Which of the following is a characteristic of the audit process?

One of the motivations for making a gift is to save on income taxes.

A landlord leases property upon which the tenant makes improvements. The improvements are significant and are not made in lieu of rent. At the end of the lease, the value of the improvements are not income to the landlord. This rule is an example of:

In 2015, Deborah became 65 years old. In 2016 she added a swimming pool, and in 2017 she converted the residence to rental property and moved into an assisted living facility. Since 2014, Deborah's ad valorem property taxes have decreased once and increased twice. Explain.

The tax law contains various tax credits, deductions, and exclusions that are designed to encourage taxpayers to obtain additional education. On what grounds can these provisions be justified?

On occasion, Congress has to enact legislation that clarifies the tax law in order to change a result reached by the U.S. Supreme Court.

In preparing a tax return, all questions on the return must be answered.

For omissions from gross income in excess of 25% of that reported, there is no statute of limitations on additional income tax assessments by the IRS.

The formula for the Federal income tax on corporations is the same as that applicable to individuals.

Brayden files his Federal income tax return by April 15, but does not pay the tax. Although he expects to pay interest on the large amount of tax he still owes, he feels that the timely filing has avoided any penalties. Is Brayden's assumption correct?

Rick, the sole proprietor of an adult entertainment club, is audited by the IRS. On the third day of the field audit, the regular IRS agent is accompanied by a special agent. Should Rick be concerned by this new development? Explain.

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 for home improvements that conserve energy.

The Federal income tax is based on a pay-as-you-go system and has become a "mass tax." Explain this statement.

For state income tax purposes, a majority of states allow a deduction for Federal income taxes.

The Federal income tax on individuals generates more revenue than the Federal income tax on corporations.

Working With the Tax Law

Tax Formula and Tax Determination; an Overview of Property Transactions

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

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters

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 for home improvements that conserve energy.