Federal Income Taxation
Textbook Exam Questions
Course Introduction
Federal Income Taxation offers a comprehensive introduction to the U.S. federal income tax system, with a primary focus on the taxation of individuals. The course examines the fundamental principles governing income recognition, deductions, and credits, as well as the statutory and judicial sources of tax law. Students will explore key topics such as gross income, exclusions, capital gains and losses, tax accounting, basis determination, and the alternative minimum tax. Emphasis is placed on understanding the policy objectives behind tax rules, their practical application, and current issues in tax reform. Through case studies, statutory interpretation, and problem-solving, students develop the analytical skills necessary for advising clients and complying with federal income tax obligations.
Recommended Textbook
South Western Federal Taxation 2018 Comprehensive 41st Edition by William H. Hoffman
Available Study Resources on Quizplus
28 Chapters
4007 Verified Questions
4007 Flashcards
Source URL: https://quizplus.com/study-set/3604
Page 2
Chapter 1: An Introduction to Taxation and Understanding
the Federal Tax Law
Available Study Resources on Quizplus for this Chatper
195 Verified Questions
195 Flashcards
Source URL: https://quizplus.com/quiz/71572
Sample Questions
Q1) Which,if any,of the following is a typical characteristic of an ad valorem tax on personalty?
A)Taxpayer compliance is greater for personal use property than for business use property.
B)The tax on automobiles sometimes considers the age of the vehicle.
C)Most states impose a tax on intangibles.
D)The tax on intangibles generates considerable revenue since it is difficult for taxpayers to avoid.
E)None of these.
Answer: B
Q2) With regard to state income taxes,explain what is meant by the "jock tax"?
Answer: Although states have a right to levy an income tax on all nonresidents who earn income within the state,they usually do so only on highly paid visitors.Such persons are often athletes,hence the designation of "jock tax."
Q3) Field audit
Answer: g
Q4) A Federal deduction for state and local income taxes paid.
Answer: c
Page 3
To view all questions and flashcards with answers, click on the resource link above.
Chapter 2: Working With the Tax Law
Available Study Resources on Quizplus for this Chatper
86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/71571
Sample Questions
Q1) Which statement is not true with respect to a Regulation that interprets the tax law?
A)Issued by the U.S. Congress.
B)Issued by the U.S. Treasury Department.
C)Designed to provide an interpretation of the tax law.
D)Carries more legal force than a Revenue Ruling.
E)All of these statements are true.
Answer: A
Q2) Distinguish between the jurisdiction of the U.S.Tax Court and a U.S.District Court.
Answer: The U.S.Tax Court hears only tax cases and is the most popular tax forum.The U.S.District Court hears a wide variety of nontax cases,including drug crimes and other Federal violations,as well as tax cases.Some Tax Court justices have been appointed from IRS or Treasury Department positions.For these reasons,some people suggest that the U.S.Tax Court has more expertise in tax matters.
Q3) Technical Advice Memoranda may not be cited as precedents by taxpayers.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3: Computing the Tax
Available Study Resources on Quizplus for this Chatper
187 Verified Questions
187 Flashcards
Source URL: https://quizplus.com/quiz/71570
Sample Questions
Q1) Global system of taxation
Answer: l
Q2) Albert buys his mother a TV.For purposes of meeting the support test,Albert cannot include the cost of the TV.
A)True
B)False Answer: False
Q3) A taxpayer who itemizes must use Form 1040,and cannot use Form 1040EZ or Form 1040A.
A)True
B)False Answer: True
Q4) Additional standard deduction Answer: a
Q5) Nonresident alien Answer: d
Q6) Resident of Canada or Mexico Answer: b
Q7) Gain on collectibles (held more than one year) Answer: j
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Gross Income: Concepts and Inclusions
Available Study Resources on Quizplus for this Chatper
124 Verified Questions
124 Flashcards
Source URL: https://quizplus.com/quiz/71569
Sample Questions
Q1) Arnold was employed during the first six months of the year and earned a $90,000 salary.During the next 6 months,he collected $7,200 of unemployment compensation,borrowed $6,000 (using his personal residence as collateral),and withdrew $1,000 from his savings account (including $60 interest).When he left his former employer,he withdrew his retirement benefits (a qualified annuity) in a lump-sum of $50,000.He made no contributions to the plan.Arnold's parents loaned him $10,000 (interest-free) on July 1 of the current year,when the Federal rate was 3%.Arnold did not repay the loan during the year and used the money for living expenses.Calculate Arnold's adjusted gross income for the year.
Q2) In January 2017,Tammy purchased a bond due in 24 months.The cost of the bond is $857 and its maturity value is $1,000.No interest is paid each year,but the compound interest rate on the bond is 8%.Tammy also purchased a Series EE United States Government bond for $558,with a maturity value in 10 years of $1,000.This is the only Series EE bond she has ever owned.The Series EE bond is sold to yield 6% interest.Tammy is 13 years old and has no other source of income.She is claimed as a dependent by her parents.Compute Tammy's gross income from the bond and Series EE bond for 2017 .
Q3) How does the taxation of Social Security benefits differ from the taxation of an annuity purchased by the taxpayer?
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Gross Income: Exclusions
Available Study Resources on Quizplus for this Chatper
113 Verified Questions
113 Flashcards
Source URL: https://quizplus.com/quiz/71568
Sample Questions
Q1) Carla is a deputy sheriff.Her employer requires that she live in the county where she is employed.Housing is very expensive; so the county agreed to pay her $4,800 per year to cover the higher cost of housing.Carla must include the housing supplement in her gross income.
A)True
B)False
Q2) Zork Corporation was very profitable and had accumulated excess cash.The company decided to repurchase some of its bonds that had been issued for $1,000,000.Because of an increase in market interest rates,Zork was able to retire the bonds for $900,000.The company is not required to recognize $100,000 of income from the discharge of its indebtedness but must reduce the basis in its assets.
A)True
B)False
Q3) What are the tax problems associated with payments received by a wife from her deceased husband's employer? (Assume the wife renders no services to the employer.)
Q4) What Federal income tax benefits are provided for college students?
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: Deductions and Losses: in General
Available Study Resources on Quizplus for this Chatper
146 Verified Questions
146 Flashcards
Source URL: https://quizplus.com/quiz/71567
Sample Questions
Q1) In applying the $1 million limit on deducting executive compensation,what corporations are subject to the deduction limit? What executives are covered?
Q2) Jacques,who is not a U.S.citizen,makes a contribution to the campaign of a candidate for governor.Cassie,a U.S.citizen,also makes a contribution to the same campaign fund.If contributions by noncitizens are illegal under state law,the contribution by Cassie is deductible,while that by Jacques is not.
A)True
B)False
Q3) A hobby activity can result in all of the hobby income being included in AGI and no deductions being allowed.
A)True
B)False
Q4) The legal cost of having a will prepared is not deductible. A)True
B)False
Q5) Are there any exceptions to the rule that personal expenditures cannot be deducted?
Q6) What losses are deductible by an individual taxpayer?
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Deductions and Losses: Certain Business
Expenses and Losses
Available Study Resources on Quizplus for this Chatper
95 Verified Questions
95 Flashcards
Source URL: https://quizplus.com/quiz/71566
Sample Questions
Q1) Alicia was involved in an automobile accident in 2017.Her car was used 60% for business and 40% for personal use.The car had originally cost $40,000.At the time of the accident,the car was worth $20,000 and Alicia had taken $8,000 of depreciation.The car was totally destroyed and Alicia had let her car insurance expire.If Alicia's AGI is $50,000 (before considering the loss),determine her itemized deduction for the casualty loss.
A)$4,500
B)$6,100
C)$8,000
D)$24,000
E)None of the above
Q2) Al,who is single,has a gain of $40,000 on the sale of § 1244 stock (small business stock) and a loss of $80,000 on the sale of § 1244 stock.As a result,Al has a $40,000 ordinary loss.
A)True
B)False
Q3) Losses on rental property are classified as deductions for AGI.
A)True
B)False
Q4) Why was the domestic production activities deduction (DPAD) enacted by Congress?
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Depreciation, cost Recovery, amortization, and Depletion
Available Study Resources on Quizplus for this Chatper
103 Verified Questions
103 Flashcards
Source URL: https://quizplus.com/quiz/71565
Sample Questions
Q1) Orange Corporation begins business on April 2,2017.The corporation reports startup expenditures of $64,000 all incurred last year.Determine the total amount that Orange can elect to deduct in 2017.
A)$0
B)$3,200
C)$4,267
D)$7,950
E)None of the above
Q2) Tan Company acquires a new machine (ten-year property) on January 15,2017,at a cost of $200,000.Tan also acquires another new machine (seven-year property) on November 5,2017,at a cost of $40,000.No election is made to use the straight-line method.The company does not make the § 179 election and elects to not take additional first-year depreciation.Determine the total deductions in calculating taxable income related to the machines for 2017.
A)$24,000
B)$25,716
C)$102,000
D)$132,858
E)None of the above
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Deductions: Employee and
Self-Employed-Related Expenses
Available Study Resources on Quizplus for this Chatper
181 Verified Questions
181 Flashcards
Source URL: https://quizplus.com/quiz/71564
Sample Questions
Q1) Qualified tuition and related expenses (under § 222)
Q2) Sue files a Form 2106 with her Form 1040.
Q3) Sue does not work for other parties.
Q4) Statutory employees:
A)Report their expenses on Form 2106.
B)Include common law employees.
C)Are subject to income tax withholdings.
D)Claim their expenses as deductions for AGI.
E)None of these.
Q5) In connection with the office in the home deduction,comment on the following:
a.Mixed use (i.e., business and personal) of the portion of the home allocated to business.
b.The difference between direct and indirect expenses for deduction purposes.
c.The classification of the expense (i.e., dfor or dfrom AGI).
Q6) Kelly,an unemployed architect,moves from Boston to Phoenix to accept a job as a chef at a restaurant.Kelly's moving expenses are not deductible because her new job is in a different trade or business.
A)True
B)False
Q7) Job hunting expenses Page 11
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 10: Deductions and Losses: Certain Itemized
Deductions
Available Study Resources on Quizplus for this Chatper
105 Verified Questions
105 Flashcards
Source URL: https://quizplus.com/quiz/71563
Sample Questions
Q1) For purposes of computing the deduction for qualified residence interest,a qualified residence includes only the taxpayer's principal residence.
A)True
B)False
Q2) During the year,Victor spent $300 on bingo games sponsored by his church.If all profits went to the church,Victor has a charitable contribution deduction of $300.
A)True
B)False
Q3) In 2017,Brandon,age 72,paid $3,000 for long-term care insurance premiums.He may include the $3,000 in computing his medical expense deduction for the year.
A)True
B)False
Q4) For purposes of computing the deduction for qualified residence interest,a qualified residence includes the taxpayer's principal residence and two other residences of the taxpayer or spouse.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 11: Investor Losses
Available Study Resources on Quizplus for this Chatper
111 Verified Questions
111 Flashcards
Source URL: https://quizplus.com/quiz/71562
Sample Questions
Q1) In 2017,Arnold invests $80,000 for a 20% interest in a partnership in which he is a material participant.The partnership incurs a loss with $100,000 being Arnold's share.Which of the following statements is incorrect?
A)Since Arnold has only $80,000 of capital at risk, he cannot deduct any more than this amount against his other income.
B)Arnold's nondeductible loss of $20,000 can be carried over and used in future years (subject to the at-risk provisions).
C)If Arnold has taxable income of $40,000 from the partnership in 2018 and there are no other transactions that affect his at-risk amount, he can use all of the $20,000 loss carried over from 2017.
D)Arnold's $100,000 loss is nondeductible in 2017 and 2018 under the passive activity loss provisions.
E)All of the statements are correct.
Q2) Dick participates in an activity for 90 hours during the year.He has no employees and there are no other participants.Dick is a material participant.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 12: Tax Credits and Payments
Available Study Resources on Quizplus for this Chatper
118 Verified Questions
118 Flashcards
Source URL: https://quizplus.com/quiz/71561
Sample Questions
Q1) A taxpayer who meets the age requirement and receives no Social Security benefits will be entitled to the full tax credit for the elderly.
A)True
B)False
Q2) Phil and Audrey,husband and wife,both are employed by Laurel Corporation.Phil earns $125,000 in salary in 2017,and Audrey earns $70,000.How much FICA tax must they pay for 2017?
Q3) An employee with outside income may be able to avoid the penalty for underpayment of estimated tax by having his employer increase income tax withholdings.
A)True
B)False
Q4) A taxpayer's earned income credit is dependent on the number of his or her qualifying children.
A)True
B)False
Q5) Discuss the treatment of unused general business credits.
Q6) Describe the withholding requirements applicable to employers.
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 13: Property Transactions: Determination of Gain or
Loss, basis Considerations, and Nontaxable Exchanges
Available Study Resources on Quizplus for this Chatper
280 Verified Questions
280 Flashcards
Source URL: https://quizplus.com/quiz/71560
Sample Questions
Q1) Discuss the logic for mandatory deferral of realized gain or loss for a § 1031 like-kind exchange.
Q2) The basis of personal use property converted to business use is:
A)Always the lower of its adjusted basis or fair market value on the date of conversion.
B)Always its adjusted basis on the date of conversion.
C)Always its fair market value on the date of conversion.
D)Always the higher of its adjusted basis or fair market value on the date of conversion.
E)None of the above.
Q3) Marilyn owns 100% of the stock of Lilac,Inc.,with an adjusted basis of $45,000.She receives a cash distribution of $160,000 from Lilac when its earnings and profits are $90,000.
a.What is Marilyn's dividend income?
b.What is Marilyn's recognized gain or loss?
c.What is Marilyn's adjusted basis for her stock after the distribution?
Q4) What is the difference between the depreciation (or cost recovery) allowed and the depreciation (or cost recovery) allowable and what effect does each have on the adjusted basis of property?
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 14: Property Transactions, capital Gains and
Losses, sec1231, and Recapture Provisions
Available Study Resources on Quizplus for this Chatper
145 Verified Questions
145 Flashcards
Source URL: https://quizplus.com/quiz/71559
Sample Questions
Q1) An individual has a $40,000 § 1245 gain,a $35,000 § 1231 gain,a $33,000 § 1231 loss,a $3,000 § 1231 lookback loss,and a $15,000 long-term capital gain.The net long-term capital gain is:
A)$30,000.
B)$40,000.
C)$17,000.
D)$15,000.
E)None of the above.
Q2) Martha is unmarried with one dependent and files as head of household.She had 2017 taxable income of $45,000 which included $16,000 of 0%/15%/20% net long-term capital gain.What is her tax on taxable income using the alternative tax on net long-term capital gain method?
Q3) The only things that the grantee of an option may do with the option are exercise it or let it expire.
A)True
B)False
Q4) The Code contains two major depreciation recapture provisions: § 1245 and § 1250. A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 15: Alternative Minimum Tax
Available Study Resources on Quizplus for this Chatper
132 Verified Questions
132 Flashcards
Source URL: https://quizplus.com/quiz/71558
Sample Questions
Q1) Do AMT adjustments and AMT preferences increase or decrease AMTI?
Q2) Durell owns a construction company that builds residential housing.The company is eligible to use the completed contract method for regular income tax purposes.What can Durell do to minimize his AMT?
Q3) Lilly is single and reports zero taxable income for 2017.She incurs positive AMT timing adjustments of $600,000 and AMT exclusions of $200,000.
a.Calculate Lilly's tentative minimum tax (TMT).
b.Calculate Lilly's AMT credit carryover to 2018.
Q4) The phaseout of the AMT exemption amount for a taxpayer filing as a head of household both begins and ends at a higher income level than it does for a single taxpayer.
A)True
B)False
Q5) The AMT adjustment for research and experimental expenditures can be avoided if the taxpayer capitalizes the expenditures and amortizes them over a 10-year period for regular tax purposes.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 16: Accounting Periods and Methods
Available Study Resources on Quizplus for this Chatper
91 Verified Questions
91 Flashcards
Source URL: https://quizplus.com/quiz/71557
Sample Questions
Q1) Duck Company has valued its inventories at FIFO cost for the past 10 years.The Company would like to change to the LIFO method,effective in 2018.
A)The election to change can be made with the 2018 tax return and the beginning inventory for 2018 will be the same as the FIFO inventory at the end of 2017 and no § 481 adjustment is required.
B)The beginning inventory value for 2018 must be computed as though the company had been using LIFO in all prior years and a § 481 adjustment is required.
C)The taxpayer must apply in 2017 for permission to change methods effective in 2018.
D)Duck must amend all prior years' tax returns to compute income by the LIFO method.
E)None of the above.
Q2) Alice,Inc.,is an S corporation that has been in business for five years.Its annual gross receipts have never exceeded $1 million.The corporation operates a retail store and also owns rental property.The sales from the retail store and the rental income may be reported by the cash method,unless Alice previously elected the accrual method.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 17: Corporations: Introduction and Operating Rules
Available Study Resources on Quizplus for this Chatper
112 Verified Questions
112 Flashcards
Source URL: https://quizplus.com/quiz/71556
Sample Questions
Q1) During the current year,Skylark Company had operating income of $420,000 and operating expenses of $250,000.In addition,Skylark had a long-term capital loss of $20,000,and a charitable contribution of $5,000.How does Toby,the sole owner of Skylark Company,report this information on his individual income tax return under following assumptions?
a.Skylark is an LLC, and Toby does not withdraw any funds from the company during the year.
b.Skylark is an S corporation, and Toby does not withdraw any funds from the company during the year.
c.Skylark is a regular (C) corporation, and Toby does not withdraw any funds from the company during the year.
Q2) During the current year,Violet,Inc.,a closely held corporation (not a PSC),has $55,000 of passive activity loss,$80,000 of net active income,and $20,000 of portfolio income.How much is Violet's taxable income for the current year?
A)$20,000
B)$45,000
C)$80,000
D)$100,000
E)None of the above
To view all questions and flashcards with answers, click on the resource link above.
Page 20
Chapter 18: Corporations: Organization and Capital Structure
Available Study Resources on Quizplus for this Chatper
93 Verified Questions
93 Flashcards
Source URL: https://quizplus.com/quiz/71555
Sample Questions
Q1) In general,the basis of property to a corporation in a transfer that qualifies as a nontaxable exchange under § 351 is the basis in the hands of the transferor shareholder decreased by the amount of any gain recognized on the transfer.
A)True
B)False
Q2) How is the transfer of liabilities in a property transaction generally treated for tax purposes? How is a transfer of liabilities generally treated in a § 351 transaction? What exceptions could arise to this usual treatment in a § 351 setting?
Q3) Three individuals form Skylark Corporation with the following contributions: Cliff,cash of $50,000 for 50 shares; Brad,land worth $20,000 (basis of $11,000) for 20 shares; and Ron,cattle worth $9,000 (basis of $6,000) for 9 shares and services worth $21,000 for 21 shares.
A)These transfers are fully taxable and not subject to § 351.
B)Ron's basis in his stock is $27,000.
C)Ron's basis in his stock is $6,000.
D)Brad's basis in his stock is $20,000.
E)None of the above.
To view all questions and flashcards with answers, click on the resource link above.
Page 21
Chapter 19: Corporations: Distributions Not in Complete
Liquidation
Available Study Resources on Quizplus for this Chatper
192 Verified Questions
192 Flashcards
Source URL: https://quizplus.com/quiz/71554
Sample Questions
Q1) The adjusted gross estate of Keith,decedent,is $12 million.Included in the gross estate is stock in Gold Corporation (E & P of $1.3 million),a closely held corporation,valued at $4.6 million as of the date of Keith's death.Keith had acquired the stock twelve years ago at a cost of $900,000.Death taxes and funeral and administration expenses for Keith's estate are $2.3 million.Gold Corporation redeems one-half of the stock from Keith's estate in a § 303 redemption to pay death taxes using property with a fair market value of $2.3 million (adjusted basis of $1.9 million).Which of the following is a correct statement regarding the tax consequences of this redemption?
A)The estate will have a basis of $2.3 million in the property received from Gold Corporation in redemption of the estate's stock.
B)Gold Corporation will not reduce its E & P as a result of the distribution of the property to Keith's estate.
C)The estate will recognize a $1.4 million long-term capital gain on the redemption.
D)Gold Corporation recognizes no gain (or loss) on the distribution of the property to Keith's estate.
E)None of the above.
Q2) State income tax paid in the current year.
To view all questions and flashcards with answers, click on the resource link above.
Page 22
Chapter 20: Corporations: Distributions in Complete
Liquidation and an Overview of Reorganization
Available Study Resources on Quizplus for this Chatper
72 Verified Questions
72 Flashcards
Source URL: https://quizplus.com/quiz/71553
Sample Questions
Q1) Section 332 can apply to a parent-subsidiary liquidation even if the subsidiary corporation is insolvent on the date of the liquidation.
A)True
B)False
Q2) The basis for the acquiring corporation in the target's assets is increased by any gain recognized by the target.
A)True
B)False
Q3) Which of the following statements is correct with respect to the § 338 election?
A)The subsidiary corporation makes the § 338 election.
B)A qualified stock purchase occurs when a corporation acquires, in a taxable transaction, at least 80% of the stock (voting power and value) of another corporation within an18-month period.
C)The parent recognizes no gain (loss) as a result of the election.
D)Gain, but not loss, is recognized by the subsidiary as a result of a deemed sale of its assets.
E)None of the above.
Q4) Compare the sale of a corporation's assets with a sale of its stock from the perspective of the seller.
Page 23
To view all questions and flashcards with answers, click on the resource link above.
Chapter 21: Partnerships
Available Study Resources on Quizplus for this Chatper
163 Verified Questions
163 Flashcards
Source URL: https://quizplus.com/quiz/71552
Sample Questions
Q1) Emma's basis in her BBDE LLC interest is $60,000 at the beginning of the tax year.Her allocable share of LLC items are as follows: $20,000 of ordinary income,$2,000 tax-exempt interest income,and a $6,000 long-term capital gain.In addition,the LLC distributed $12,000 of cash to Emma during the year.Assuming the LLC had no liabilities at the beginning or the end of the year,Emma's ending basis in her LLC interest is $76,000.
A)True
B)False
Q2) A partner will have the same profit-sharing,loss-sharing,and capital-sharing ownership percentages.
A)True
B)False
Q3) A partnership is an association formed by two or more taxpayers (which may be any type of entity) to carry on a trade or business.
A)True
B)False
Q4) General partnership
Q5) Business purpose
Q6) Syndication costs
Page 24
To view all questions and flashcards with answers, click on the resource link above.
Chapter 22: S Corporations
Available Study Resources on Quizplus for this Chatper
145 Verified Questions
145 Flashcards
Source URL: https://quizplus.com/quiz/71551
Sample Questions
Q1) On January 1,Bobby and Alice own equally all of the stock of an electing S corporation called Prairie Dirt Delight.The entity incurs a $60,000 loss for a non-leap year.On the 200th day of the year (not a leap year),Bobby sells his one-half of the stock to his son,Saul.How much of the $60,000 loss,if any,is allocated to Bobby?
A)$0
B)$13,562
C)$16,438
D)$32,877
Q2) A one person LLC can be a shareholder of an S corporation.
A)True
B)False
Q3) Which,if any,of the following can be eligible shareholders of an S corporation?
A)A partnership.
B)A nonresident alien.
C)A voting trust.
D)The estate of a deceased shareholder.
Q4) For a new corporation,a premature S election may not be effective.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 25
Chapter 23: Exempt Entities
Available Study Resources on Quizplus for this Chatper
141 Verified Questions
141 Flashcards
Source URL: https://quizplus.com/quiz/71550
Sample Questions
Q1) Bingo games
Q2) An educational organization such as the College of William and Mary that is exempt under § 501(c)(3) cannot be classified as a private foundation if its only sources of revenue are from tuition and alumni contributions.
A)True
B)False
Q3) Why are some organizations exempt from Federal income tax?
Q4) Discuss benefits for which an exempt organization may be eligible,other than exemption from Federal income tax.
Q5) Unrelated business income is generally that derived from the unrelated trade or business,reduced by the deductions directly connected with the conduct of the unrelated trade or business.
Q6) Only certain exempt organizations must obtain IRS approval to obtain exempt status.
A)True
B)False
Q7) Tax on excess business holdings
Q8) § 501(c)(6) business league
Q9) Form 990
To view all questions and flashcards with answers, click on the resource link above. Page 26
Chapter 24: Multistate Corporate Taxation
Available Study Resources on Quizplus for this Chatper
196 Verified Questions
196 Flashcards
Source URL: https://quizplus.com/quiz/71549
Sample Questions
Q1) Treasury Bond interest income.
Q2) A garment purchased by an employee for wear at an office job.
Q3) The model law relating to the assignment of income among the states for corporations is:
A)Public Law 86-272.
B)The Multistate Tax Treaty.
C)The Multistate Tax Commission (MTC).
D)The Uniform Division of Income for Tax Purposes Act (UDITPA).
Q4) Compost Corporation has finished its computation of Federal taxable income.In State Q,the derivation of state corporate taxable income starts with the Federal amount and makes a number of modifications.List at least five such modifications that Compost is likely to encounter.In this regard,follow the general UDITPA rules,and list both addition and subtraction modifications.
Q5) Typically exempt from the sales/use tax base is the purchase by a symphony orchestra of printed music for its players.
A)True
B)False
Q6) Operating a warehouse for inventory that is held in the state.
Q7) WillCo completes the construction of production facilities in S.
To view all questions and flashcards with answers, click on the resource link above. Page 27
Chapter 25: Taxation of International Transactions
Available Study Resources on Quizplus for this Chatper
164 Verified Questions
164 Flashcards
Source URL: https://quizplus.com/quiz/71548
Sample Questions
Q1) Olaf,a citizen of Norway with no trade or business activities in the United States,sells at a gain 200 shares of MicroShift,Inc.,a U.S.company.The sale takes place through Olaf's broker in Oslo.How is this gain treated for U.S.tax purposes?
A)It is foreign-source income subject to U.S. taxation.
B)It is foreign-source income not subject to U.S. taxation.
C)It is U.S.-source income subject to U.S. taxation.
D)It is U.S.-source income exempt from U.S. taxation.
Q2) Waltz,Inc.,a U.S.taxpayer,pays foreign taxes of $50,000 on foreign-source general basket income of $90,000.Waltz's worldwide taxable income is $450,000,on which it owes U.S.taxes of $157,500 before FTC.Waltz's FTC is $50,000.
A)True
B)False
Q3) The purpose of the transfer pricing rules is to ensure that taxpayers have ultimate flexibility in shifting profits between related entities. A)True B)False
Q4) A deemed paid foreign tax credit is included in gross income.
Q5) An individual who gives up U.S.citizenship to avoid U.S.income taxes.
To view all questions and flashcards with answers, click on the resource link above. Page 28
Chapter 26: Tax Practice and Ethics
Available Study Resources on Quizplus for this Chatper
183 Verified Questions
183 Flashcards
Source URL: https://quizplus.com/quiz/71547
Sample Questions
Q1) Negligence.
Q2) Young-Eagle files her 2018 Form 1040 on July 1,2019.The Federal tax statute of limitations for this return expires on:
A)April 15, 2022.
B)July 1, 2022.
C)July 1, 2026.
D)The statute never expires for a late-filed return.
Q3) Compute the failure to pay and failure to file penalties for John,who filed his 2016 income tax return on December 14,2017,paying the $10,000 amount due.On April 1,2017,John submitted a six-month extension of time in which to file his return; he paid no tax with the extension request.He has no reasonable cause for failing to file his return by October 15,or for failing to pay the tax that was due on April 15,2017.John's failure to comply with the tax laws was not fraudulent.
Q4) Jaime's negligence penalty will be waived,under the reasonable cause exception.He told the court,"My taxes were wrong because I couldn't understand the tax law."
A)True
B)False
Q5) Preparer penalty for taking an unreasonable tax return position.
To view all questions and flashcards with answers, click on the resource link above. Page 29
Chapter 27: The Federal Gift and Estate Taxes
Available Study Resources on Quizplus for this Chatper
167 Verified Questions
167 Flashcards
Source URL: https://quizplus.com/quiz/71546
Sample Questions
Q1) Some states impose inheritance taxes,but the Federal tax system does not.
A)True
B)False
Q2) Election to split gifts
Q3) A surviving spouse's share of the community property is not included in the deceased spouse's gross estate.
A)True
B)False
Q4) Manfredo makes a donation of $50,000 to the church where he was baptized in Mexico City.The gift does not qualify as a charitable contribution for Federal income tax purposes.
A)True
B)False
Q5) Harry and Brenda are husband and wife.Using her funds,Brenda purchases real estate which she lists as: "Harry and Brenda,joint tenants with right of survivorship." If Brenda dies first,all of the value of the real estate will be included in her gross estate.
A)True
B)False
Q6) Future interest
To view all questions and flashcards with answers, click on the resource link above.
Chapter 28: Income Taxation of Trusts and Estates
Available Study Resources on Quizplus for this Chatper
167 Verified Questions
167 Flashcards
Source URL: https://quizplus.com/quiz/71545
Sample Questions
Q1) The Uldis Trust reports distributable net income for the year of $100,000 and no income from tax-exempt sources.Under the terms of the trust instrument,the trustee must distribute $75,000 to Roger and $75,000 to Sally.After paying these amounts,the trustee is empowered to make additional distributions at its discretion.Exercising this authority,the Uldis trustee distributes an additional $10,000 to Roger and $30,000 to Sally.How much gross income from the trust must Sally recognize?
A)$30,000
B)$50,000
C)$100,000
D)$105,000
Q2) The entity has a legal identity separate from its beneficiaries.
Q3) The Malik Estate operates a manufacturing business.Malik made no income distributions this year.It can claim the full deduction for the MACRS depreciation of the assets of the business.
A)True
B)False
Q4) Identify the parties that are present when an estate is created,and their key duties.Then do the same for a trust.
Q5) A decedent created the entity.
To view all questions and flashcards with answers, click on the resource link above. Page 31