Question 1

Match the statements that relate to each other.Note: Some choices may be used more than once or not at all.
-DIF

Accepted Answer

A) Deferral of gains from involuntary conversions 
B) Carryback and carryforward of net operating losses 
C) "No change" is one possible result 
D) State income tax applied to visiting nonresident 
E) IRS special agent
F)Undoing the "piggyback" result
G)Ideal budget goal as to new tax legislation
H)Every state that has a general sales tax has one
I)Imposed by all states and the Federal government
J)Imposed by some states but not the Federal government
K)Imposed only by the Federal government
L)No correct match provided 
A) Deferral of gains from involuntary conversions 
B) Carryback and carryforward of net operating losses 
C) "No change" is one possible result 
D) State income tax applied to visiting nonresident 
E) IRS special agent
F)Undoing the "piggyback" result
G)Ideal budget goal as to new tax legislation
H)Every state that has a general sales tax has one
I)Imposed by all states and the Federal government
J)Imposed by some states but not the Federal government
K)Imposed only by the Federal government
L)No correct match provided

Question 2

Using the choices provided below,show the justification for each provision of the tax law listed.
-Tax brackets are increased for inflation.

Accepted Answer

A) Economic considerations 
B) Social considerations 
C) Equity considerations 
A) Economic considerations 
B) Social considerations 
C) Equity considerations

Question 3

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 2014.In reviewing her 2013 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 4

The tax law provides various tax credits,deductions,and exclusions that are designed to encourage taxpayers to obtain additional education.These provisions can be justified on both economic and equity grounds.

Accepted Answer

A) True 
 B)False

Question 5

Currently,the tax base for the Social Security component of the FICA is not limited to a dollar amount.

Accepted Answer

A) True 
 B)False

Question 6

Match the statements that relate to each other.Note: Some choices may be used more than once.
-More than 25% gross income omission and statute of limitations

Accepted Answer

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) 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

Question 7

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 8

A major advantage of a flat tax type of income tax is its simplicity.

Accepted Answer

A) True 
 B)False

Question 9

Using the choices provided below,show the justification for each provision of the tax law listed.
-Contributions to charitable organizations are deductible.

Accepted Answer

A) Economic considerations 
B) Social considerations 
C) Equity considerations 
A) Economic considerations 
B) Social considerations 
C) Equity considerations

Question 10

Using the choices provided below,show the justification for each provision of the tax law listed.
-A small business corporation can elect to avoid the corporate income tax.

Accepted Answer

A) Economic considerations 
B) Social considerations 
C) Equity considerations 
A) Economic considerations 
B) Social considerations 
C) Equity considerations

Question 11

In 1985,Roy leased real estate to Drab Corporation for 20 years.Drab Corporation made significant capital improvements to the property.In 2005,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 2014 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

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Using the choices provided below,show the justification for each provision of the tax law listed.
-Additional depreciation deduction allowed for the year the asset is acquired.

Accepted Answer

A) Economic considerations 
B) Social considerations 
C) Equity considerations 
A) Economic considerations 
B) Social considerations 
C) Equity considerations

Question 14

Match the statements that relate to each other.Note: Some choices may be used more than once.
-Criminal fraud penalty

Accepted Answer

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) 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

Question 15

Taxes not imposed by the Federal government include:

Accepted Answer

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

Question 16

If a "special agent" becomes involved in the audit of a return,this indicates that the IRS suspects that fraud is involved.

Accepted Answer

A) True 
 B)False

Question 17

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 18

Two months after the burglary of his personal residence,Eric is audited by the IRS.Among the items taken in the burglary was a shoe box containing approximately $50,000 in cash.Eric is the owner and operator of a cash-and-carry liquor store.Eric wonders why he was audited.Can you help explain?

Accepted Answer

Although Eric's audit by the IRS could b

Question 19

Some states use their state income tax return as a means of collecting unpaid sales and use taxes.

Accepted Answer

A) True 
 B)False

Question 20

Both economic and social considerations can be used to justify:

Accepted Answer

A) Favorable tax treatment for accident and health plans provided for employees and financed by employers. 
B) Disallowance of any deduction for expenditures deemed to be contrary to public policy (e.g. ,fines,penalties,illegal kickbacks,bribes to government officials). 
C) Various tax credits,deductions,and exclusions that are designed to encourage taxpayers to obtain additional education. 
D) Allowance of a deduction for state and local income taxes paid. 
E) None of these. 
A) Favorable tax treatment for accident and health plans provided for employees and financed by employers. 
B) Disallowance of any deduction for expenditures deemed to be contrary to public policy (e.g. ,fines,penalties,illegal kickbacks,bribes to government officials). 
C) Various tax credits,deductions,and exclusions that are designed to encourage taxpayers to obtain additional education. 
D) Allowance of a deduction for state and local income taxes paid. 
E) None of these.

Match the statements that relate to each other.Note: Some choices may be used more than once or not at all. -DIF

Using the choices provided below,show the justification for each provision of the tax law listed. -Tax brackets are increased for inflation.

The tax law provides various tax credits,deductions,and exclusions that are designed to encourage taxpayers to obtain additional education.These provisions can be justified on both economic and equity grounds.

Currently,the tax base for the Social Security component of the FICA is not limited to a dollar amount.

Match the statements that relate to each other.Note: Some choices may be used more than once. -More than 25% gross income omission and statute of limitations

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.

A major advantage of a flat tax type of income tax is its simplicity.

Using the choices provided below,show the justification for each provision of the tax law listed. -Contributions to charitable organizations are deductible.

Using the choices provided below,show the justification for each provision of the tax law listed. -A small business corporation can elect to avoid the corporate income tax.

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

Using the choices provided below,show the justification for each provision of the tax law listed. -Additional depreciation deduction allowed for the year the asset is acquired.

Match the statements that relate to each other.Note: Some choices may be used more than once. -Criminal fraud penalty

Taxes not imposed by the Federal government include:

If a "special agent" becomes involved in the audit of a return,this indicates that the IRS suspects that fraud is involved.

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?

Two months after the burglary of his personal residence,Eric is audited by the IRS.Among the items taken in the burglary was a shoe box containing approximately $50,000 in cash.Eric is the owner and operator of a cash-and-carry liquor store.Eric wonders why he was audited.Can you help explain?

Some states use their state income tax return as a means of collecting unpaid sales and use taxes.

Both economic and social considerations can be used to justify:

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 the Federal Tax Law

Match the statements that relate to each other.Note: Some choices may be used more than once or not at all. -DIF

Using the choices provided below,show the justification for each provision of the tax law listed. -Tax brackets are increased for inflation.

The tax law provides various tax credits,deductions,and exclusions that are designed to encourage taxpayers to obtain additional education.These provisions can be justified on both economic and equity grounds.

Currently,the tax base for the Social Security component of the FICA is not limited to a dollar amount.

Match the statements that relate to each other.Note: Some choices may be used more than once. -More than 25% gross income omission and statute of limitations

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.

A major advantage of a flat tax type of income tax is its simplicity.

Using the choices provided below,show the justification for each provision of the tax law listed. -Contributions to charitable organizations are deductible.

Using the choices provided below,show the justification for each provision of the tax law listed. -A small business corporation can elect to avoid the corporate income tax.

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

Using the choices provided below,show the justification for each provision of the tax law listed. -Additional depreciation deduction allowed for the year the asset is acquired.

Match the statements that relate to each other.Note: Some choices may be used more than once. -Criminal fraud penalty

Taxes not imposed by the Federal government include:

If a "special agent" becomes involved in the audit of a return,this indicates that the IRS suspects that fraud is involved.

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?

Two months after the burglary of his personal residence,Eric is audited by the IRS.Among the items taken in the burglary was a shoe box containing approximately $50,000 in cash.Eric is the owner and operator of a cash-and-carry liquor store.Eric wonders why he was audited.Can you help explain?

Some states use their state income tax return as a means of collecting unpaid sales and use taxes.

Both economic and social considerations can be used to justify:

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