Question 1

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

Question 2

When returns are processed, they are scored to determine their potential for yielding additional tax revenues. This program is called

Accepted Answer

A)  Taxpayer Compliance Measurement Program.
B)  Discriminant Function System.
C)  Standard Audit Program.
D)  Field Audit Program. B

Question 3

Chris, a single taxpayer, had the following income and deductions during 2014:
  Calculate Chris's tax liability due or refund for 2014.

Accepted Answer

Tax $5,081.25 + .25(39,350 - 36,900)= $5,693.75
$6,500 taxes withheld - 5,693.75 = $806.25 tax refund

Question 4

Which of the following taxes is progressive?

Accepted Answer

A)  sales tax
B)  excise tax
C)  property tax
D)  federal income tax

Question 5

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 6

In an S corporation, shareholders

Accepted Answer

A)  are taxed on their proportionate share of earnings.
B)  are taxed only on dividends.
C)  may allocate income among themselves in order to consider special contributions.
D)  are only taxed on salaries.

Question 7

Latashia reports $100,000 of gross income on her 2014 tax return, filed April 15, 2015. She omits $30,000 of income, but the error was not fraudulent. When does the statute of limitations for examining her tax return expire?

Accepted Answer

A)  April 15, 2017
B)  April 15, 2018
C)  April 15, 2021
D)  It never expires.

Question 8

Describe the types of audits that the IRS conducts.

Accepted Answer

The answer of Describe the types of audits that the...

Question 9

Which of the following taxes is proportional?

Accepted Answer

A)  gift tax
B)  income tax
C)  sales tax
D)  Federal Insurance Contributions Act (FIC
A)

Question 10

Vincent makes the following gifts during 2014:
$15,000 cash gift to wife
Gift of automobile valued at $35,000 to his adult son
Gift of golf clubs valued at $5,000 to a friend
$10,000 contribution to church
Although he is married, none of the gifts are considered joint gifts with his wife. What are the total taxable gifts subject to the unified transfer tax?

Accepted Answer

The answer of Vincent makes the following gifts during 2014:
$15,000...

Question 11

A tax bill introduced in the House of Representatives is then

Accepted Answer

A)  referred to the House Ways and Means Committee for hearings and approval.
B)  referred to the full House for hearings.
C)  forwarded to the Senate Finance Committee for consideration.
D)  voted upon by the full House.

Question 12

Alan files his 2014 tax return on April 1, 2015. His return contains no misstatements or omissions of income. The statute of limitations for changes to the return expires

Accepted Answer

A)  April 1, 2018.
B)  April 15, 2018.
C)  April 15, 2017.
D)  The statute of limitations never expires.

Question 13

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...

Question 14

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.

Question 15

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 16

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.

Question 17

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.

Question 18

The terms "progressive tax" and "flat tax" are synonymous.

Accepted Answer

A) True 
 B)False

Question 19

The term "tax law" includes

Accepted Answer

A)  Internal Revenue Code.
B)  Treasury Regulations.
C)  judicial decisions.
D)  all of the above.

Question 20

The various entities in the federal income tax system may be classified into two general categories, taxpaying entities (such as individuals and C [regular] corporations)and flow-through entities such as sole proprietorships, partnerships, S corporations, and limited liability companies.

Accepted Answer

A) True 
 B)False

Exam 1: An Introduction to Taxation

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

When returns are processed, they are scored to determine their potential for yielding additional tax revenues. This program is called

Chris, a single taxpayer, had the following income and deductions during 2014: Calculate Chris's tax liability due or refund for 2014.

Which of the following taxes is progressive?

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

In an S corporation, shareholders

Latashia reports $100,000 of gross income on her 2014 tax return, filed April 15, 2015. She omits $30,000 of income, but the error was not fraudulent. When does the statute of limitations for examining her tax return expire?

Describe the types of audits that the IRS conducts.

Which of the following taxes is proportional?

A tax bill introduced in the House of Representatives is then

Alan files his 2014 tax return on April 1, 2015. His return contains no misstatements or omissions of income. The statute of limitations for changes to the return expires

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

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

Horizontal equity means that

What is an important aspect of a limited liability partnership?

The terms "progressive tax" and "flat tax" are synonymous.

The term "tax law" includes

The various entities in the federal income tax system may be classified into two general categories, taxpaying entities (such as individuals and C [regular] corporations)and flow-through entities such as sole proprietorships, partnerships, S corporations, and limited liability companies.