Introduction to Taxation Final Exam Questions https://quizplus.com/study-set/438 28 Chapters 4038 Verified Questions
Introduction to Taxation Final Exam Questions Course Introduction Introduction to Taxation offers students a comprehensive overview of the fundamental principles and concepts underlying taxation. The course explores the objectives and structure of tax systems, the different types of taxes imposed on individuals and businesses, and the administration and enforcement of tax laws. Students will gain an understanding of key topics such as taxable income, tax liability, deductions, credits, and compliance requirements. Through case studies and practical examples, the course emphasizes the role of taxation in government finance and economic policy, ultimately preparing students to understand and apply basic tax concepts in both personal and professional contexts.
Recommended Textbook South Western Federal Taxation 2019 Comprehensive 42nd Edition by David M. Maloney
Available Study Resources on Quizplus 28 Chapters 4038 Verified Questions 4038 Flashcards Source URL: https://quizplus.com/study-set/438
Page 2
Chapter 1: An Introduction to Taxation and Understanding the Federal Tax Law Available Study Resources on Quizplus for this Chatper 211 Verified Questions 211 Flashcards Source URL: https://quizplus.com/quiz/182054
Sample Questions Q1) Provisions in the tax law that promote energy conservation and more use of alternative (non-fossil) fuels can be justified by: A) Political considerations. B) Economic and social considerations. C) Promoting administrative feasibility. D) Encouragement of small business. E) None of these. Answer: B Q2) States impose either a state income tax or a general sales tax, but not both types of taxes. A)True B)False Answer: False Q3) For the negligence penalty to apply, the underpayment must be caused by intentional disregard of rules and regulations without intent to defraud. A)True B)False Answer: True To view all questions and flashcards with Page answers, 3 click on the resource link above.
Chapter 2: Working with the Tax Law Available Study Resources on Quizplus for this Chatper 102 Verified Questions 102 Flashcards Source URL: https://quizplus.com/quiz/7709
Sample Questions Q1) Three judges will normally hear each U.S. Tax Court case. A)True B)False Answer: False Q2) A taxpayer must pay any tax deficiency assessed by the IRS and sue for a refund to bring suit in the U.S. Court of Federal Claims. Only in the Tax Court can jurisdiction be obtained without first paying the assessed tax deficiency. A)True B)False Answer: True Q3) Which of the following statements about a nonacquiescence is correct? A) A nonacquiescence is issued in the Federal Registrar. B) Nonacquiescences are published only for certain regular decisions of the U.S. Tax Court. C) A nonacquiescence in published in the Internal Revenue Bulletin. D) The IRS does not issue nonacquiescences to adverse decisions that are not appealed. E) All of the above are correct. Answer: C 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 180 Verified Questions 180 Flashcards Source URL: https://quizplus.com/quiz/182055
Sample Questions Q1) Multiple support agreement Answer: j Q2) Butch and Minerva are divorced in December of 2018. Since they were married for more than one-half of the year, they are considered as married for 2018. A)True B)False Answer: False Q3) An ex-husband (divorce occurred last year) who lives with taxpayer. Answer: b Q4) When the kiddie tax applies, the child need not file an income tax return because the child's income will be reported on the parents' return. A)True B)False Answer: False Q5) An uncle who lives with taxpayer. Answer: b Q6) A daughter who does not live with taxpayer. Answer: b To view all questions and flashcards with Page answers, 5 click on the resource link above.
Chapter 4: Gross Income: Concepts and Inclusions Available Study Resources on Quizplus for this Chatper 125 Verified Questions 125 Flashcards Source URL: https://quizplus.com/quiz/7711
Sample Questions Q1) Dick and Jane are divorced in 2017. At the time of the divorce, Dick had a lawsuit pending. He had filed suit against a former employer for overtime pay. As part of a divorce agreement, Dick agreed to pay Jane one-half of the proceeds from the lawsuit. In 2018, Dick collected $250,000 from the former employer and paid Jane $125,000. What are the tax consequences for Dick receiving the $250,000 and then paying Jane the $125,000? Q2) The constructive receipt doctrine requires that income be recognized when it is made available to the cash basis taxpayer, although it has not been actually received. The constructive receipt doctrine does not apply to accrual basis taxpayers. A)True B)False Q3) After the divorce in 2015, Jeff was required to pay $18,000 per year to his former spouse, Darlene, who had custody of their child. Jeff's payments will be reduced to $12,000 per year in the event the child dies or reaches age 21. During the year, Jeff paid the $18,000 required under the divorce agreement. Darlene must include the $12,000 in gross income. A)True B)False 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/7712
Sample Questions Q1) A U.S. citizen is always required to include in gross income the salary and wages earned while working in a foreign country even if the foreign country taxes the 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) Juan, was considering purchasing an interest in a tax-exempt bond fund for $100,000, when he discovered that the interest must be included on his state income tax return. The interest rate is 5%. His marginal Federal tax rate is 35%, and his marginal state income tax rate is 10%. Juan itemizes his deductions on his Federal income tax return. As an alternative, Juan can purchase a state bond (a "double-exempt bond") yielding 4.9% interest that is exempt from both Federal and state income tax. Which investment would yield the greater after-tax return? 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 156 Verified Questions 156 Flashcards Source URL: https://quizplus.com/quiz/7713
Sample Questions Q1) Robin and Jeff own an unincorporated hardware store. They determine their salaries at the end of the year by using the amount required to reduce the net income of the hardware store to $0. Based on this policy, Robin and Jeff each receive a total salary of $125,000. This is paid as follows: $8,000 per month and $29,000 on December 31. Determine the amount of the salary deduction. Q2) Sandra sold 500 shares of Wren Corporation to Bob, her brother, for its fair market value. She had paid $26,000 for the stock. Calculate Sandra's and Bob's gain or loss under the following circumstances: a. Sandra sold the shares to Bob for $20,000. One year later, Bob sold them for $18,000. b. Sandra sold the shares to Bob for $30,000. One year later, Bob sold them for $27,000. c. Sandra sold the shares to Bob for $20,000. One year later, Bob sold them for $28,000. Q3) If a taxpayer operated an illegal business (not drug trafficking), what expenses can be deducted and what expenses are disallowed? Q4) Can a trade or business expense be deductible if it is necessary but not ordinary? 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 94 Verified Questions 94 Flashcards Source URL: https://quizplus.com/quiz/7714
Sample Questions Q1) A nonbusiness bad debt deduction can be taken any year after the debt becomes totally worthless. A)True B)False Q2) Losses on rental property are classified as deductions for AGI. A)True B)False Q3) Roger, an individual, owns a proprietorship called Green Thing. For the year 2018, Roger has the following items: ? Business income-$200,000. ? Business expense-$150,000. ? Loss on a completely destroyed business machine. The machine had an adjusted basis of $25,000 and a fair market value of $20,000. ? Loss on a business truck. The truck had an adjusted basis of $8,000. The repairs to fix the truck cost $10,000. Determine Roger's adjusted gross income for 2018. Q4) A taxpayer can carry an NOL forward indefinitely. A)True B)False Page 9 To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Depreciation, Cost Recovery, Amortization, and Depletion Available Study Resources on Quizplus for this Chatper 120 Verified Questions 120 Flashcards Source URL: https://quizplus.com/quiz/7715
Sample Questions Q1) Under MACRS, which one of the following is not considered in determining depreciation for tax purposes? A) Cost of asset. B) Property recovery class. C) Half-year convention. D) Salvage (or residual) value. E) None of the above. Q2) On June 1, 2018, Norm leases a taxi and places it in service. The lease payments are $1,000 per month. Assuming the dollar amount from the IRS table for such leases is $241, determine Norm's gross income inclusion amount. A) $0 B) $241 C) $907 D) $1,687 E) None of the above Q3) The § 179 limit for a sports utility vehicle with a GVW of 7,000 pounds will not apply if the sports utility vehicle is used as a taxi. A)True B)False Page 10 To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Deductions: Employee and Self-Employed-Related Expenses Available Study Resources on Quizplus for this Chatper 153 Verified Questions 153 Flashcards Source URL: https://quizplus.com/quiz/7716
Sample Questions Q1) A taxpayer who claims the standard deduction may be able to claim an office in the home deduction. A)True B)False Q2) Under the right circumstances, a taxpayer's meals and lodging expense can qualify as a deductible education expense. A)True B)False Q3) If a taxpayer does not own a home but rents an apartment, the office in the home deduction is not available. A)True B)False Q4) Both traditional and Roth IRAs possess the advantage of tax-free accumulation of income within the plan. A)True B)False Q5) Compare a § 401(k) plan with an IRA. Page 11 performed. Q6) Lynn determines when the services are to be Q7) Sue was trained by Lynn. To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Deductions and Losses: Certain Itemized Deductions Available Study Resources on Quizplus for this Chatper 104 Verified Questions 104 Flashcards Source URL: https://quizplus.com/quiz/7717
Sample Questions Q1) Fees for automobile inspections, automobile titles and registration, bridge and highway tolls, parking meter deposits, and postage are not deductible if incurred for personal reasons, but they are deductible as deductions for AGI if incurred as a business expense by a self-employed taxpayer. A)True B)False Q2) Emily, who lives in Indiana, volunteered to travel to Louisiana in March to work on a home-building project for Habitat for Humanity (a qualified charitable organization). She was in Louisiana for three weeks. She normally makes $500 per week as a carpenter's assistant and plans to deduct $1,500 as a charitable contribution. In addition, she incurred the following costs in connection with the trip: $600 for transportation, $1,200 for lodging, and $400 for meals. What is Emily's deduction associated with this charitable activity? A) $600 B) $1,200 C) $1,800 D) $2,200 E) $3,700 To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Investor Losses Available Study Resources on Quizplus for this Chatper 130 Verified Questions 130 Flashcards Source URL: https://quizplus.com/quiz/7718
Sample Questions Q1) Nathan owns Activity A, which produces income, and Activity B, which produces passive activity losses. From a tax planning perspective, Nathan will be better off if Activity A is passive. A)True B)False Q2) Mary Jane participates for 100 hours during the year in an activity she owns. She has no employees and is the only participant in the activity. The activity is a significant participation activity. A)True B)False Q3) Treatment of suspended credits when passive activity is sold at a loss. Q4) In the current year, Don has a $55,000 loss from a business he owns. His at-risk amount at the end of the year, prior to considering the current year loss, is $36,000. He will be allowed to deduct the $55,000 loss this year if he is a material participant in the business. A)True B)False Q5) When a taxpayer disposes of a passive activity by gift, what happens to any unused passive activity losses? 13 click on the resource link above. To view all questions and flashcards withPage answers,
Chapter 12: Tax Credits and Payments Available Study Resources on Quizplus for this Chatper 111 Verified Questions 111 Flashcards Source URL: https://quizplus.com/quiz/7719
Sample Questions Q1) Steve records a tentative general business credit of $110,000 for the current year. His net regular tax liability before t general business credit is $125,000, and his tentative minimum tax is $100,000. Compute Steve's allowable general business credit for the year. Q2) Which of the following statements concerning the credit for child and dependent care expenses is not correct? A) A taxpayer is not allowed both an exclusion from income and the credit for child and dependent care expenses on the same amount. B) A taxpayer is not allowed both a deduction as a medical expense and the credit for child and dependent care expenses on the same amount. C) If a taxpayer's adjusted gross income exceeds $43,000, the rate for the credit for child and dependent care expenses is 20%. D) If a taxpayer's adjusted gross income exceeds $15,000 but is not over $17,000, the rate for the credit for child and dependent care expenses is 35%. E) All of the above statements are correct. Q3) Describe the withholding requirements applicable to employers. Q4) Discuss the treatment of unused general business credits. To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges Available Study Resources on Quizplus for this Chatper 285 Verified Questions 285 Flashcards Source URL: https://quizplus.com/quiz/7720
Sample Questions Q1) Latisha owns a warehouse with an adjusted basis of $200,000. She exchanges it for a strip mall building worth $225,000. Which of the following statements is correct? A) If the warehouse was used in Latisha's business to store inventory and the strip mall building is to be rented to tenants, her recognized gain is $25,000 and her basis for the strip mall building is $225,000. B) If the warehouse was used in Latisha's business to store inventory and the strip mall building is to be used as a retail outlet for her business, her recognized gain is $0 and her basis for the strip mall building is $200,000. C) If the warehouse is used by Latisha to store personal use items such as excess furniture and the strip mall building is to be rented to tenants, her recognized gain is $25,000 and her basis for the strip mall building is $225,000. D) Only b. and c. are correct. E) a., b., and c. are correct. Q2) What effect do the assumption of liabilities have on a § 1031 like-kind exchange? Q3) Identify two tax planning techniques that can be used to avoid the wash sale disallowance of loss. To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Property Transactions: Capital Gains and Losses, Section 1231, and Recapture Provisions Available Study Resources on Quizplus for this Chatper 167 Verified Questions 167 Flashcards Source URL: https://quizplus.com/quiz/7721
Sample Questions Q1) May an individual that has purchased a patent be a holder of that patent? Q2) The subdivision of real property into lots for resale when no substantial physical improvements have been made to the property never causes the gain from sale of the lots to be treated as ordinary income. A)True B)False Q3) "Collectibles" held long-term and sold at a gain are subject to maximum tax rate of 28%. An individual taxpayer recently sold an antique car for $40,000. The car had been held for several years and $30,000 was originally paid for it. Explain why the car is or is not a collectible. Q4) In 2018, an individual taxpayer has $863,000 of taxable income that includes $48,000 of 0%/15%/20% long-term capital gain. Which of the following statements is correct? A) All of the LTCG will be taxed at 0%. B) All of the LTCG will be taxed at 15%. C) All of the LTCG will be taxed at 20%. D) Some of the LTCG will be taxed at 15% and some at 20%. E) None of the above. To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Taxing Business Income Available Study Resources on Quizplus for this Chatper 60 Verified Questions 60 Flashcards Source URL: https://quizplus.com/quiz/7722
Sample Questions Q1) Rajib is the sole shareholder of Robin Corporation, a calendar year S corporation. In the current year, Robin earned net profit of $350,000 ($520,000 gross income - $170,000 operating expenses) and distributed $80,000 to Rajib. Rajib must report Robin Corporation profit of $350,000 on his Federal income tax return. A)True B)False Q2) Donald owns a 45% interest in a partnership that earned $130,000 in the current year. He also owns 45% of the stock in a C corporation that earned $130,000 during the year. Donald received $20,000 in distributions from each of the two entities during the year. With respect to this information, Donald must report $78,500 of income on his individual income tax return for the year. A)True B)False Q3) The QBI deduction is set to expire after 2020. A)True B)False Q4) Describe the limitations on the qualified business income deduction that apply to high income taxpayers. To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Accounting Periods and Methods Available Study Resources on Quizplus for this Chatper 88 Verified Questions 88 Flashcards Source URL: https://quizplus.com/quiz/7723
Sample Questions Q1) Ted, a cash basis taxpayer, received a $150,000 bonus in 2018 when he was in the 35% marginal tax bracket. In 2019, when Ted was in the 24% marginal tax bracket, it was discovered that the bonus was incorrectly computed, and Ted was required to refund $40,000 to his employer. As a result of the refund, Ted can reduce his 2019 tax liability by $14,000 (.35 × $40,000). A)True B)False Q2) Which of the following must use the accrual method of accounting? I. A property management company, operating as a C corporation, with average annual gross receipts of $50 million. II. An incorporated law firm with average annual gross receipts of $26 million. III. An unincorporated grocery store with average annual gross receipts of $27,000,000. A) All of the above must use the accrual method. B) None of the above must use the accrual method. C) Only I and II must use the accrual method. D) Only I and III must use the accrual method. E) Only III must use the accrual method. To view all questions and flashcards with answers, click on the resource link above.
Page 18
Chapter 17: Corporations: Introduction and Operating Rules Available Study Resources on Quizplus for this Chatper 108 Verified Questions 108 Flashcards Source URL: https://quizplus.com/quiz/7724
Sample Questions Q1) During the current year, Sparrow Corporation, a calendar year C corporation, had operating income of $425,000, operating expenses of $280,000, a short-term capital loss of $10,000, and a long-term capital gain of $25,000. How much is Sparrow's income tax liability for the year? A) $32,700 B) $33,600 C) $45,650 D) $62,400 E) None of the above Q2) During the current year, Woodchuck, Inc., a closely held personal service corporation, has $115,000 of net active income, $40,000 of portfolio income, and $135,000 of passive activity loss. What is Woodchuck's taxable income for the current year? A) $0 B) $20,000 C) $40,000 D) $155,000 E) None of the above Q3) Contrast the tax treatment of capital gains and losses of C corporations with that of individual taxpayers. To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 18: Corporations: Organization and Capital Structure Available Study Resources on Quizplus for this Chatper 109 Verified Questions 109 Flashcards Source URL: https://quizplus.com/quiz/7725
Sample Questions Q1) For § 351 purposes, stock rights and stock warrants are included in the definition of "stock." A)True B)False Q2) Mary transfers a building (adjusted basis of $15,000 and fair market value of $90,000) to White Corporation. In return, Mary receives 80% of White Corporation's stock (worth $65,000) and an automobile (fair market value of $5,000). In addition, there is an outstanding mortgage of $20,000 (taken out 15 years ago) on the building, which White Corporation assumes. With respect to this transaction: A) Mary's recognized gain is $10,000. B) Mary's recognized gain is $5,000. C) Mary has no recognized gain. D) White Corporation's basis in the building is $15,000. E) None of the above. Q3) One month after Sally incorporates her sole proprietorship, she gives 25% of the stock to her children. Section 351 cannot apply to Sally because she has not satisfied the 80% control requirement. A)True B)False Page 20 To view all questions and flashcards with answers, click on the resource link above.
Chapter 19: Corporations: Distributions Not in Complete Liquidation Available Study Resources on Quizplus for this Chatper 185 Verified Questions 185 Flashcards Source URL: https://quizplus.com/quiz/7726
Sample Questions Q1) Hawk Corporation has 2,000 shares of stock outstanding: Marina owns 800 shares, Russell owns 500 shares, Velvet Partnership owns 400 shares, and Yellow Corporation owns 300 shares. Marina and Russell, unrelated individuals, are equal partners of Velvet Partnership. Marina owns 35% of the stock in Yellow Corporation. a. Applying the § 318 stock attribution rules, determine how many shares in Hawk Corporation each shareholder owns, directly and indirectly: Marina: Russell: Velvet Partnership: Yellow Corporation: b. Assume, instead, that Marina owns 60% of Yellow Corporation. How many shares does Marina own, directly and indirectly, in Hawk Corporation? Q2) For purposes of the waiver of the family attribution rules in a complete termination redemption, the former shareholder must notify the IRS within 30 days of acquiring a prohibited interest in the corporation during the 10-year period following the redemption. A)True B)False Q3) Loss on sale between related parties in 2018. To view all questions and flashcards with answers, click on the resource link above. Page 21
Chapter 20: Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations Available Study Resources on Quizplus for this Chatper 71 Verified Questions 71 Flashcards Source URL: https://quizplus.com/quiz/7727
Sample Questions Q1) The amount of gain recognized by a shareholder in a corporate reorganization is based on the shareholder's proportionate share of E & P. A)True B)False Q2) If a parent corporation makes a § 338 election, the subsidiary corporation must be liquidated. A)True B)False Q3) What are the tax consequences of a § 332 liquidation to the parent corporation, subsidiary corporation, and minority shareholder? Q4) If a liquidation qualifies under § 332, any minority shareholder will recognize gain or loss equal to the difference between the fair market value of assets received and the basis of the shareholder's stock. A)True B)False Q5) Discuss the role of letter rulings in corporate reorganizations. Q6) Compare the sale of a corporation's assets with a sale of its stock from the Page 22 perspective of the seller. 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 248 Verified Questions 248 Flashcards Source URL: https://quizplus.com/quiz/7728
Sample Questions Q1) On the formation of a partnership, when might a "disguised sale" occur? How can this treatment be avoided? Q2) Ken and Lars formed the equal KL Partnership during the current year, with Ken contributing $100,000 in cash and Lars contributing land (basis of $60,000, fair market value of $40,000) and equipment (basis of $0, fair market value of $60,000). Lars recognizes a $40,000 gain on the contribution and his basis in his partnership interest is $100,000. A)True B)False Q3) To meet the substantial economic effect tests, a partnership's allocations of income and deductions to the partners are required to be proportionate to the partners' percentage ownership of partnership capital. A)True B)False Q4) One of the disadvantages of the partnership form is that the partner's share of the partnership's taxable income is taxed to the partner, even if it is not distributed. A)True B)False To view all questions and flashcards with answers, click on the resource link above. Page 23
Chapter 22: S Corporations Available Study Resources on Quizplus for this Chatper 129 Verified Questions 129 Flashcards Source URL: https://quizplus.com/quiz/7729
Sample Questions Q1) When loss assets are distributed by an S corporation, a shareholder's basis is equal to the asset's fair market value. A)True B)False Q2) The maximum number of actual shareholders in an S corporation is: A) 75. B) 100. C) 200. D) Some other number. E) Indeterminable. Q3) Which, if any, of the following items decreases an S corporation's AAA? A) Section 1231 loss. B) Expenses related to tax-exempt income. C) Depletion in excess of basis. D) Distribution from earnings and profits. E) None of the above affects the AAA. Q4) The exclusion of ________________ on the disposition of small business stock (is/is not)________________ available for S stock. Q5) Some ____________________and taxation rules apply to an S corporation. 24 click on the resource link above. To view all questions and flashcards withPage answers,
Chapter 23: Exempt Entities Available Study Resources on Quizplus for this Chatper 153 Verified Questions 153 Flashcards Source URL: https://quizplus.com/quiz/7730
Sample Questions Q1) To what types of organizations does the UBIT apply? Q2) Which of the following statements is correct regarding the disclosure Regulations for exempt entities? A) Posting the required tax forms on the Internet is an acceptable technique for satisfying the "widely available" requirement. B) Forms 990 and 1023 must be readily available to the general public. C) If an individual requests a copy of the required tax forms in writing, the exempt entity must provide a copy within 30 days. D) Only a. and b. are correct. E) a., b., and c. are all correct. Q3) Form 990-PF. Q4) Discuss any negative tax consequences that result from an exempt organization being classified as a private foundation. Q5) Tax on self-dealing Q6) Define a qualified corporate sponsorship payment. Q7) What are intermediate sanctions and to what types of exempt organizations do they apply? Q8) Why are some organizations exempt from Federal income tax? Page 25 To view all questions and flashcards with answers, click on the resource link above.
Chapter 24: Multistate Corporate Taxation Available Study Resources on Quizplus for this Chatper 204 Verified Questions 204 Flashcards Source URL: https://quizplus.com/quiz/7731
Sample Questions Q1) Politicians frequently use tax credits and exemptions to create economic development incentives. A)True B)False Q2) In applying the typical apportionment formula: A) The aggregate of state taxable incomes equals Federal taxable income. B) The aggregate of state taxable incomes may not equal Federal taxable income. C) When Federal taxable income is negative, all states' taxable incomes are negative. D) When Federal taxable income is negative, aggregate state taxable incomes total to zero. Q3) Most states exempt consumer purchases of groceries from the collection of the local sales tax. A)True B)False Q4) A local property tax: A) Applies to the equipment of a business. B) Applies to an individual's stock portfolio. C) Both a. and b. D) Neither a. nor b. To view all questions and flashcards with answers, click on the resource link above. Page 26
Chapter 25: Taxation of International Transactions Available Study Resources on Quizplus for this Chatper 146 Verified Questions 146 Flashcards Source URL: https://quizplus.com/quiz/7732
Sample Questions Q1) When a business taxpayer "goes international," the first step usually is to create an overseas branch sales office. A)True B)False Q2) An appropriate transfer price is one that considers the risks, assets, and functions of the persons to whom income is assigned. A)True B)False Q3) An individual who gives up U.S. citizenship to avoid U.S. income taxes. Q4) To reduce current income taxation, a U.S. person might transfer to a subsidiary in a tax haven country: A) Active business assets. B) Investment assets. C) Both a. and b. are tax-effective. D) Neither a. nor b. can be used to shift income to the tax haven country. Q5) A country with very low or no income tax. Q6) Describe and diagram the timeline that most businesses use to enter the international markets. Q7) Activity that creates the potential forPage effectively connected income. 27 To view all questions and flashcards with answers, click on the resource link above.
Chapter 26: Tax Practice and Ethics Available Study Resources on Quizplus for this Chatper 184 Verified Questions 184 Flashcards Source URL: https://quizplus.com/quiz/7733
Sample Questions Q1) Quon filed an amended return, claiming a $100,000 refund. The IRS disallowed the refund, and it can assess a penalty if there was no reasonable basis of support for the refund claim, in the amount of ________________% of the disallowed amount. Q2) Juarez (a calendar year taxpayer) donates a painting to a local art museum (a qualified charity). The painting cost Juarez $2,000 ten years ago and, according to one of Juarez's friends (an amateur artist), now is worth $40,000. On his income tax return, Juarez deducts $40,000 as a Form 1040 charitable contribution. Upon later audit by the IRS, it is determined that the true value of the painting was $30,000. Assuming that Juarez is subject to a 24% marginal Federal income tax rate, his penalty for overvaluation is: A) $10,000 (minimum penalty). B) $5,000. C) $2,400. D) $2,000. E) $0. Q3) In taking a dispute to the Appeals Division, a written protest is required of the taxpayer when the proposed deficiency exceeds $____________________. Q4) Negligence. To view all questions and flashcards with answers, click on the resource link above. Page 28
Chapter 27: The Federal Gift and Estate Taxes Available Study Resources on Quizplus for this Chatper 141 Verified Questions 141 Flashcards Source URL: https://quizplus.com/quiz/7734
Sample Questions Q1) Under the alternate valuation date election, each asset in the gross estate is valued at the lesser of the date of death value or six months thereafter. A)True B)False Q2) Matt and Patricia are husband and wife and live in Oregon. In 2000 and using her funds, Patricia purchases a residence for $400,000, listing title to the property as "Matt and Patricia, joint tenants with right of survivorship." In 2018, Matt dies first when the residence is worth $2 million. A correct statement as to these transactions is: A) In 2018, Matt's gross estate includes $1 million and a marital deduction of $1 million is allowed for estate tax purposes. B) In 2000, Patricia made a gift to Matt but no marital deduction is available for gift tax purposes. C) In 2000, Patricia did not make a gift to Matt. D) In 2018, Matt's estate includes nothing as to the property. Q3) Bank account held as joint tenant with mother. Mother provided all of the funds. Mother survives. Q4) Note receivable issued by a grandson and forgiven by the decedent in her will. To view all questions and flashcards with answers, click on the resource link above.
Page 29
Chapter 28: Income Taxation of Trusts and Estates Available Study Resources on Quizplus for this Chatper 161 Verified Questions 161 Flashcards Source URL: https://quizplus.com/quiz/7735
Sample Questions Q1) In computing distributable net income (DNI) for a trust, one removes any net capital gain or loss that is allocable to income. A)True B)False Q2) Which of the following taxpayers can be subject to an entity-level Federal income tax? A) Complex trust. B) Partnership. C) Limited liability company. D) All of the above taxpayers are passthrough entities, and they never are subject to an entity-level Federal income tax. Q3) When DNI includes exempt interest income, the beneficiary includes less than the full amount of DNI in current- year gross income. A)True B)False Q4) The Federal income taxation of a trust or estate can be described as a "modified pass-through" system. Compare fiduciary income tax rules to those that apply to LLCs and to individuals. To view all questions and flashcards with answers, click on the resource link above. Page 30