Introduction to Taxation
Final Test Solutions
Course Introduction
Introduction to Taxation provides students with a foundational understanding of the concepts, principles, and purposes of taxation systems, with an emphasis on federal, state, and local tax structures. The course covers the legal framework governing taxation, different types of taxes, tax policy objectives, and the role of taxation in economic and social contexts. Students will explore the implications of tax regulations for individuals and businesses, basic tax calculations, compliance requirements, and the ethical considerations faced by taxpayers and professionals. The course prepares students for further study in taxation, accounting, and finance, while fostering a critical appreciation of how tax systems impact society.
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) Taxes levied by all states include:
A)Tobacco excise tax.
B)Individual income tax.
C)Inheritance tax.
D)General sales tax.
E)None of these.
Answer: A
Q2) Sales made by mail order are not exempt from the application of a general sales (or use) tax.
A)True
B)False Answer: True
Q3) Use tax
Answer: h
Q4) Under state amnesty programs,all delinquent and unpaid income taxes are forgiven.
A)True
B)False
Answer: False
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) The Golsen rule has been overturned by the U.S.Supreme Court.
A)True
B)False Answer: False
Q2) Determination letters usually involve completed transactions.
A)True
B)False Answer: True
Q3) Which of the following is not an administrative source of tax law?
A)Field Service Advice
B)Revenue Procedure
C)Technical Advice Memoranda
D)General Counsel Memorandum
E)All of these are administrative sources. Answer: E
Q4) A U.S.District Court is the lowest trial court.
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) 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
Q2) The Dargers have itemized deductions that exceed the standard deduction.However,when they file their joint return,they choose the standard deduction option.
a.Is this proper procedure?
b.Aside from a possible misunderstanding as to the tax law, what might be the reason for the Darger's choice?
Answer: 11ea87ef_7658_19b7_9939_25b8a4540e21_TB4136_00
Q3) Jason and Peg are married and file a joint return.Both are over 65 years of age and Jason is blind.Their standard deduction for 2017 is $16,450 ($12,700 + $1,250 + $1,250 + $1,250).
A)True
B)False
Answer: True
Q4) Scholarship funds for tuition
Answer: h
Page 5
To view all questions and flashcards with answers, click on the resource link above.
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) Fred is a full-time teacher.He has written a book and receives royalties from it.Fred's mother,Mabel,is age 65 and lives on her Social Security benefits and gifts from her son,Fred.This year Fred directed the publisher to make the royalty check payable to Mabel because she needs the money for support.Fred must include the amount of the royalty check in his gross income.
A)True
B)False
Q2) Nicholas owned stock that decreased in value by $20,000 during the year,but he did not sell the stock.He earned $45,000 salary,but received only $34,000 because $11,000 in taxes were withheld.Nicholas saved $10,000 of his salary and used the remainder for personal living expenses.Nicholas's economic income for the year exceeded his gross income for tax purposes.
A)True B)False
Q3) Rachel owns rental properties.When Rachel rents to a new tenant,she usually requires the tenant to pay an amount in addition to the first month's rent.The additional amount serves as security for damages to the property and the tenant's failure to pay future rents.How should the payments be characterized (e.g.,on lease documents) to minimize Rachel's current tax liability?
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) The earnings from a qualified state tuition program account are deferred from taxation until they are used for qualified higher education expenses.At that time,the amount taken from the fund must be included in the gross income of the person who contributed to the account.
A)True
B)False
Q2) Mia participated in a qualified state tuition program for the benefit of her son Michael.She contributed $15,000.When Michael entered college,the balance in the fund satisfied the tuition charge of $20,000.When the funds were withdrawn to pay the college tuition for Michael,neither Mia nor Michael must include $5,000 ($20,000 - $15,000) in gross income.
A)True
B)False
Q3) Ben was hospitalized for back problems.While he was away from the job,he collected his regular salary from an employer-sponsored income protection insurance policy.Ben's employer-sponsored hospitalization insurance policy also paid for 90% of his medical expenses.Ben also collected on an income protection policy that he purchased.Which of the above sources of income are taxable? Explain the basis for excluding any item or items.
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) What is the appropriate tax treatment for expenditures paid by a taxpayer for another's benefit?
Q2) Under what circumstances may a taxpayer deduct the expenses of investigating a possible business acquisition,if (1) the business is not acquired; and (2) the business is acquired?
Q3) Can a trade or business expense be deductible if it is necessary but not ordinary?
Q4) Alice incurs qualified moving expenses of $12,000.If she is reimbursed by her employer,the deduction is classified as a deduction for AGI.If not reimbursed,the deduction is classified as an itemized deduction.
A)True
B)False
Q5) The amount of the addition to the reserve for bad debts for an accrual method taxpayer is allowed as a deduction for tax purposes,but is not allowed for a cash method taxpayer.
A)True
B)False
Q6) If a taxpayer operated an illegal business (not drug trafficking),what expenses can be deducted and what expenses are disallowed?
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) A business bad debt is a debt unrelated to the taxpayer's trade or business either when it was created or when it became worthless.
A)True
B)False
Q2) Roger,an individual,owns a proprietorship called Green Thing.For the year 2017,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 2017.
Q3) The amount of partial worthlessness on a nonbusiness bad debt is deducted in the year partial worthlessness is determined.
A)True
B)False
Q4) Why was the domestic production activities deduction (DPAD) enacted by Congress?
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
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) Augie purchased one new asset during the year (five-year property) on November 10,2017,at a cost of $660,000.She would like to use the § 179 election and will also take additional first-year depreciation.The income from the business before the cost recovery deduction and the § 179 deduction was $600,000.Determine the total cost recovery deduction with respect to the asset for 2017.
A)$30,500
B)$320,250
C)$510,000
D)$588,750
E)None of the above
Q3) Discuss the reason for the inclusion amount with respect to leased automobiles.
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
181 Verified Questions
181 Flashcards
Source URL: https://quizplus.com/quiz/71564
Sample Questions
Q1) At age 65,Camilla retires from her job in Boston and moves to Florida.As a retiree,she is not subject to the time test in deducting her moving expenses.
A)True
B)False
Q2) One indicia of independent contractor (rather than employee) status is when the individual performing the services is paid based on time spent (rather than on tasks performed).
A)True
B)False
Q3) For tax purposes,"travel" is a broader classification than "transportation."
A)True
B)False
Q4) 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
Q5) Club dues deductible
Q6) Sue was trained by Lynn.
To view all questions and flashcards with answers, click on the resource link above. Page 11
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) Leona borrows $100,000 from First National Bank and uses the proceeds to purchase City of Houston bonds.The interest Leona pays on this loan is deductible as investment interest subject to the investment interest limits.
A)True
B)False
Q2) Harry and Sally were divorced three years ago.In July of the current year,their son,Joe,broke his arm falling out of a tree.Joe lives with Sally and Sally claims him as a dependent on her tax return.Harry paid for the medical expenses related to Joe's injury.Can Harry claim the medical expenses he paid for Joe on his tax return?
Q3) On December 31,2017,Lynette used her credit card to make a $500 contribution to the United Way,a qualified charitable organization.She will pay her credit card balance in January 2018.If Lynette itemizes,she can deduct the $500 in 2017.
A)True
B)False
Q4) Linda is planning to buy Vicki's home.They want to keep the transaction simple,so the sales agreement will not apportion the property taxes that Vicki has already paid on the home.Comment on the tax implications for Linda and Vicki.
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
111 Verified Questions
111 Flashcards
Source URL: https://quizplus.com/quiz/71562
Sample Questions
Q1) In the current year,Lucile,who has AGI of $70,000 before considering rental activities,is active in three separate real estate rental activities and is in the 28% tax bracket.She had $15,000 of losses from Activity A,$25,000 of losses from Activity B,and income of $20,000 from Activity C.She also had $3,100 of tax credits from Activity A.Calculate her deductions and credits currently allowed and the suspended losses and credits.
Q2) Josh has investments in two passive activities.Activity A,acquired three years ago,produces income in the current year of $60,000.Activity B,acquired last year,produces a loss of $100,000 in the current year.At the beginning of this year,Josh's at-risk amounts in Activities A and B are $10,000 and $100,000,respectively.What is the amount of Josh's suspended passive activity loss with respect to these activities at the end of the current year?
A)$0
B)$36,000
C)$40,000
D)$100,000
E)None of the above
Q3) Treatment of suspended credits when passive activity is sold at a loss.
Q4) Significant participation activity.
Q5) Material participation.
To view all questions and flashcards with answers, click on the resource link above. Page 13
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) The purpose of the tax credit for rehabilitation expenditures is to encourage the relocation of businesses from older,economically distressed areas (i.e.,inner city) to newer locations.
A)True
B)False
Q2) Certain high-income individuals are subject to three additional Medicare taxes-on wages,unearned income,and tax credits claimed.
A)True
B)False
Q3) The maximum child tax credit under current law is $1,500 per qualifying child.
A)True
B)False
Q4) A taxpayer who qualifies for the low-income housing credit claims the credit over a 20-year period.
A)True
B)False
Q5) Jack and Jill are married,have three children,and have earnings during 2017 of $28,500.Do they qualify for the earned income credit? If so,calculate the amount of credit that is available to them.
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
280 Verified Questions
280 Flashcards
Source URL: https://quizplus.com/quiz/71560
Sample Questions
Q1) Morgan owned a convertible that he had purchased two years ago for $46,000 and which he transfers to his sole proprietorship.How is the sole proprietorship's basis for the car calculated? What additional information does Morgan need?
Q2) The adjusted basis for a taxable bond purchased at a premium is reduced if the amortization election is made.The amount of the amortized premium is treated as an interest deduction.
A)True
B)False
Q3) How is the donee's basis calculated for the gift of appreciated property for a gift made before 1977? Assume the donor pays gift tax.
Q4) Ramon sells land with an adjusted basis of $120,000 and a fair market value of $175,000 to Pauline,his wife,for $175,000.Discuss how the tax consequences would differ if Ramon and Pauline had never been married.
Q5) If boot is received in a § 1031 like-kind exchange,the recognized gain cannot exceed the realized gain.
A)True
B)False
Q6) Define an involuntary conversion.
Page 15
To view all questions and flashcards with answers, click on the resource link above.
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) Which of the following assets held by a manufacturing business is a § 1231 asset?
A)Inventory.
B)Office furniture used in the business and held less than one year.
C)A factory building used in the business and held more than one year.
D)Accounts receivable.
E)All of the above.
Q2) In 2017,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.
Q3) Since the Code section that defines "capital asset" says what is not a capital asset,other Code sections have to help determine what is and what is not a capital gain or loss.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 16
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) A taxpayer has a passive activity loss for the current tax year for regular income tax purposes and for AMT purposes.Is it possible that the passive activity losses will be the same amount?
Q2) Celia and Christian,who are married filing jointly,have one dependent and do not itemize deductions.They report taxable income of $192,000 and tax preferences of $53,000 in 2017.What is their AMT base for 2017?
A)$0.
B)$212,587.
C)$215,550.
D)$269,850.
Q3) The AMT calculated using the indirect method will produce a different amount than the AMT calculated using the direct method.
A)True B)False
Q4) Negative AMT adjustments for the current year caused by timing differences are offset by the positive AMT adjustments in prior tax years also caused by timing differences.
A)True B)False
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
91 Verified Questions
91 Flashcards
Source URL: https://quizplus.com/quiz/71557
Sample Questions
Q1) The company has consistently used the LIFO inventory method and has deferred over $1 million of income from using that method.However,in the last two years,the prices it pays for goods has been decreasing.Therefore,the company is considering changing to the FIFO inventory method.What would be some tax consequences of the change?
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
Q3) In regard to choosing a tax year for a business owned by individuals,which form of business provides the greater number of options in regard to the tax year?
A)A C corporation formed by medical doctors to conduct their practice.
B)A C corporation that is in the retail grocery business.
C)A real estate partnership.
D)An S corporation engaged in manufacturing.
E)All of the above have the same options.
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
112 Verified Questions
112 Flashcards
Source URL: https://quizplus.com/quiz/71556
Sample Questions
Q1) The corporate marginal income tax rates range from 15% to 39%,while the individual marginal income tax rates range from 10% to 39.6%.
A)True
B)False
Q2) Income that is included in net income per books but not included in taxable income is a subtraction item on Schedule M-1.
A)True
B)False
Q3) Peach Corporation had $210,000 of net active income,$45,000 of portfolio income,and a $230,000 passive loss during the current year.If Peach is a closely held C corporation that is not a PSC,it can deduct $210,000 of the passive loss in the year.
A)True
B)False
Q4) Briefly describe the accounting methods available for adoption by a C corporation.
Q5) What is a limited liability company? What favorable nontax and tax attributes does the LLC entity form offer taxpayers?
Q6) Briefly discuss the requirements for the dividends received deduction.
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
93 Verified Questions
93 Flashcards
Source URL: https://quizplus.com/quiz/71555
Sample Questions
Q1) Ashley,a 70% shareholder of Wren Corporation,transfers property with a basis of $250,000 and a fair market value of $900,000 to Wren Corporation for additional stock.Ashley owns 78% of Wren after the transfer.Two other shareholders in Wren transfer a nominal amount of property to Wren along with Ashley's transfer so that Ashley and the two shareholders own 90% of the Wren stock after the transfer.Does Ashley have taxable gain on the transfer?
Q2) To help avoid the thin capitalization problem,it is advisable to make the repayment of the debt contingent upon the corporation's earnings.
A)True
B)False
Q3) Kim,a real estate dealer,and others form Eagle Corporation under § 351.Kim contributes inventory (land held for resale) in return for Eagle stock.The holding period for the stock includes the holding period of the inventory.
A)True
B)False
Q4) What is the rationale underlying the tax deferral treatment available under § 351?
To view all questions and flashcards with answers, click on the resource link above.
Page 20
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) A shareholder's basis in property acquired in a stock redemption is the property's fair market value as of the date of redemption.
A)True
B)False
Q2) Which of the following is an incorrect statement regarding the application of the § 318 stock attribution rules?
A)An individual is not deemed to own the shares owned by his or her siblings.
B)Stock owned by an estate is deemed to be owned in full by a beneficiary.
C)Stock owned by any shareholder owning 50% or more of a corporation's stock is deemed to be owned in full by the corporation.
D)Stock owned by a partnership is deemed to be owned proportionately by a partner. E)None of the above.
Q3) A corporation that distributes a property dividend must reduce its E & P by the adjusted basis of the property less any liability on the property.
A)True
B)False
Q4) Briefly define the term "earnings and profits."
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 Reorganization
Available Study Resources on Quizplus for this Chatper
72 Verified Questions
72 Flashcards
Source URL: https://quizplus.com/quiz/71553
Sample Questions
Q1) For a corporate restructuring to qualify as a tax-free reorganization,the step transaction doctrine must apply.
A)True
B)False
Q2) Which of the following statements is true concerning all types of tax-free corporate reorganizations?
A)Assets are transferred from one corporation to another.
B)Stock is exchanged with shareholders.
C)Liabilities that are assumed when cash is also used as consideration will be treated as boot.
D)Corporations and shareholders involved in the reorganization will recognize gains but not losses.
E)None of the above statements is true.
Q3) Originally,the Supreme Court decided that corporate reorganizations were substantially continuations of the prior entities and thus should not be subject to taxation.
A)True
B)False
Q4) Discuss the role of letter rulings in corporate reorganizations.
To view all questions and flashcards with answers, click on the resource link above. Page 22
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) Allison is a 40% partner in the BAM Partnership.At the beginning of the tax year,Allison's basis in the partnership interest was $100,000,including her share of partnership liabilities.During the current year,BAM reported an ordinary loss of $60,000 (before the following payments to the partners).In addition,BAM made an ordinary distribution of $8,000 to Allison and paid partner Brian a $20,000 consulting fee.At the end of the year,Allison's share of partnership liabilities decreased by $10,000.Assuming loss limitation rules do not apply,Allison's basis in the partnership interest at the end of the year is:
A)$2,000.
B)$50,000.
C)$58,000.
D)$70,000.
Q2) Katherine invested $80,000 this year to purchase a 30% interest in the KLM Partnership.The partnership reported $200,000 of net income from operations,a $2,000 short-term capital loss,and a $10,000 charitable contribution.In addition,the partnership distributed $20,000 to Katherine and $10,000 each to partners Lauren and Missy.Assuming the partnership has no beginning or ending liabilities,what is Katherine's basis in her partnership interest at the end of the year?
Q3) What are "syndication costs" and how are they treated for tax purposes?
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
145 Verified Questions
145 Flashcards
Source URL: https://quizplus.com/quiz/71551
Sample Questions
Q1) 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.
Q2) Which statement is incorrect with respect to the number-of-shareholders test in filing an S election?
A)Husband Jaime and wife Maria count as one shareholder.
B)Grandmother Adela and granddaughter Maria count as one shareholder.
C)Husband Jaime and the estate of wife Maria count as one shareholder.
D)Husband Jaime and ex-wife Isabel count as one shareholder.
E)None of the above statements is incorrect.
Q3) An S shareholder's stock basis is reduced by flow-through losses before accounting for distributions.
A)True
B)False
Q4) Most IRAs cannot own stock in an S corporation.
A)True
B)False
Page 24
To view all questions and flashcards with answers, click on the resource link above.
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) The due date for the Exempt Organization Business Income Tax Return (Form 990-T) is the fifteenth day of the third month after the end of the taxable year.
A)True
B)False
Q2) Unrelated debt-financed income,net of the unrelated debt-financed deductions,is subject to the unrelated business income tax only if the exempt organization is a private foundation.
A)True
B)False
Q3) To satisfy the "not for profit" requirement for exempt status,the entity may not be engaged in a trade or business.
A)True
B)False
Q4) What is the purpose of the unrelated business income tax?
Q5) The League of Women Voters is a § 501(c)(3) organization.
A)True
B)False
Q6) Identify the components of the tax model for unrelated business taxable income.
Q7) § 501(c)(3) organization
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
196 Verified Questions
196 Flashcards
Source URL: https://quizplus.com/quiz/71549
Sample Questions
Q1) An assembly worker earns a $50,000 salary and receives a fringe benefit package worth $15,000.The payroll factor assigns $65,000 for this employee.
A)True
B)False
Q2) The most commonly used state income tax apportionment formula is:
A)Sales factor only.
B)Sales factor double-weighted.
C)Sales factor equally weighted with property and payroll.
D)Payroll factor only.
Q3) Allocation is a method under which a corporation's _________________________ income is directly assigned to the specific states where the income is derived.
Q4) The property factor includes business assets that the taxpayer owns,but also those merely used under a lease agreement.
A)True
B)False
Q5) Training administrative personnel to use an update to ordering software.
Q6) A garment purchased by an employee for wear at an office job.
26
To view all questions and flashcards with answers, click on the resource link above.
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) Performance,Inc.,a U.S.corporation,owns 100% of Krumb,Ltd.,a foreign corporation.Krumb earns only general basket income.During the current year,Krumb paid Performance a $200,000 dividend.The foreign tax credit associated with this dividend is $30,000.The foreign jurisdiction requires a withholding tax of 30%,so Performance received only $140,000 in cash as a result of the dividend.What is Performance's total U.S.gross income reported as a result of the $140,000 cash received?
A)$30,000
B)$140,000
C)$200,000
D)$230,000
Q2) Which of the following is not a foreign person?
A)Foreign corporation 51% owned by U.S. shareholders.
B)Foreign corporation 100% owned by a domestic corporation.
C)Citizen of Germany with U.S. permanent resident status (i.e., green card).
D)Citizen of Italy who spends 14 days vacationing in the United States.
Q3) With respect to income generated by non-U.S.persons,does the U.S.apply a "worldwide" or a "territorial" approach.Be specific.
Q4) A net loss in all foreign tax credit limitation baskets.
Q5) Maximum years for a foreign tax credit carryforward.
To view all questions and flashcards with answers, click on the resource link above. Page 27
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) It typically is advisable that an IRS audit be conducted at the office of the tax advisor,and not of the client.
A)True
B)False
Q2) In the context of civil tax fraud litigation,the burden of proof is on the taxpayer to show the court by a "preponderance of the evidence" that he or she was not acting with an intent to evade a tax.
A)True
B)False
Q3) Fiona,a VITA volunteer for her college's tax clinic,is not a tax preparer as defined by the Code.Thus,Fiona is exempted from the Code's tax preparer penalties.
A)True
B)False
Q4) Misstatement of withholding allowances.
Q5) Negligence in filing a return.
Q6) Willful and reckless conduct.
Q7) A CPA,an attorney,and a(n) ____________________ can represent taxpayers before the IRS in an Appeals conference.
Page 28
To view all questions and flashcards with answers, click on the resource link above.
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) Ben and Lynn are married and have four pre-teen grandchildren.They want to contribute to a § 529 plan on behalf of their education.For 2017,what is the maximum amount they can transfer to the plan without making a taxable gift?
Q3) Barry pays State University for his dependent daughter's room and board.Barry has made a transfer that is subject to the Federal gift tax.
A)True
B)False
Q4) Ling and Jiang are unrelated and equal joint tenants in a plot of land.Ling died this year.Ling's share of the land goes to:
A)The party named in Ling's will.
B)Ling's surviving spouse.
C)Jiang, under community property principles.
D)Jiang, under a right of survivorship.
Q5) Credit for tax on prior transfers
Q6) Alternate valuation date
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
167 Verified Questions
167 Flashcards
Source URL: https://quizplus.com/quiz/71545
Sample Questions
Q1) The entity typically can choose any fiscal tax year.
Q2) In computing the Federal taxable income of a trust,the ____________________ (first,last) step is to determine its fiduciary accounting income.
Q3) The Crown Trust distributed one-half of its accounting income to Lee this year.Lee also is allocated one-half of Crown's credit for building low-income housing.
A)True
B)False
Q4) The Suarez Trust generated distributable net income (DNI) this year of $150,000,two-thirds of which was portfolio income,and the balance of which was exempt interest.Under the terms of the trust,Clara Suarez is to receive an annual income distribution of $30,000.At the discretion of the trustee,additional distributions can be made to Clara or to Clark Suarez III.This year,the trustee's distributions to Clara totaled $60,000.Clark received $90,000.How much of the trust's DNI is assigned to Clara?
A)$75,000
B)$60,000
C)$45,000
D)$30,000
To view all questions and flashcards with answers, click on the resource link above. Page 30