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. 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 -"Pay-as-you-go" (paygo)

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 available for the purchase of a vehicle that uses alternative (non-fossil) fuels.

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. -Contributions to charitable organizations are deductible.

An inheritance tax is a tax on a decedent's right to pass property at death.

Taxes levied by both states and the Federal government include:

Without obtaining an extension,Pam files her income tax return 55 days after the due date.With her return,she pays an additional tax of $60,000.Disregarding any interest element,what is Pam's penalty for failure to pay and to file?

The civil fraud penalty can entail large fines and possible incarceration.

Upon audit by the IRS,Faith is assessed a deficiency of $40,000 of which $25,000 is attributable to negligence.The 20% negligence penalty will apply to $25,000.

The Federal estate and gift taxes are examples of progressive taxes.

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?

Because the law is complicated,most individual taxpayers are not able to complete their Federal income tax returns without outside assistance.

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

Which,if any,of the following is a typical characteristic of an ad valorem tax on personalty?

Federal excise taxes that are no longer imposed include:

To lessen,or eliminate,the effect of multiple taxation,a taxpayer who is subject to both foreign and U.S.income taxes on the same income is allowed either a deduction or a credit for the foreign tax paid.

Several years ago,Logan purchased extra grazing land for his ranch at a cost of $240,000.In 2017,the land is condemned by the state for development as a highway maintenance depot.Under the condemnation award,Logan receives $600,000 for the land.Within the same year,he replaces the property with other grazing land.What is Logan's tax situation if the replacement land cost: a.$210,000? b.$360,000? c.$630,000? d.Why?

The FICA tax (Medicare component) on wages is progressive since the tax due increases as wages increase.

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. -A small business corporation can elect to avoid the corporate income tax.

A Federal excise tax is no longer imposed on admission to theaters.

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