IRS Regulations and Compliance Exam Practice Tests
Course Introduction
This course provides an in-depth exploration of the rules, guidelines, and procedures set forth by the Internal Revenue Service (IRS) for individual and business taxpayers. Students will examine key aspects of tax law, including income reporting, allowable deductions and credits, filing requirements, and current compliance issues. Emphasis is placed on practical applications of IRS regulations, understanding the consequences of non-compliance, and the procedures for responding to audits and other IRS inquiries. Through case studies and real-world scenarios, students will develop the skills necessary to navigate regulatory complexities and ensure ethical adherence to federal tax laws.
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) A rationale for the installment method tax rule is:
A) Ability to pay.
B) Equity and fairness.
C) Simplicity.
D) Revenue neutrality.
Answer: A
Q2) Under what conditions is it permissible, from an ethical standpoint, for a CPA firm to outsource tax return preparation to a third party?
Answer: First, the clients' confidentiality must be preserved. Second, the CPA firm must verify the accuracy of the work. Third, the clients must be advised as to the practice.
Q3) Under Clint's will, all of his property passes to either the Lutheran Church or to his wife. No Federal estate tax will be due on Clint's death in 2018.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 3
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) Which of the following types of Regulations has the highest tax validity?
A) Temporary
B) Legislative
C) Interpretive
D) Procedural
E) None of these
Answer: B
Q2) Subchapter C refers to the subchapter in the Internal Revenue Code that deals with partnerships and partners.
A)True
B)False
Answer: False
Q3) Revenue Rulings issued by the National Office of the IRS carry the same legal force and effect as Regulations.
A)True
B)False
Answer: False
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) Lee, a citizen of Korea, is a resident of the U.S. Any rent income Lee receives from land he owns in Korea is not subject to the U.S. income tax.
A)True
B)False
Answer: False
Q2) Tax Rate Schedule
Answer: h
Q3) A niece who lives with taxpayer, is 20 years old, earns $5,000, and is a full-time student.
Answer: a
Q4) Frank sold his personal use automobile for a loss of $9,000. He also sold a personal coin collection for a gain of $10,000. As a result of these sales, $10,000 is subject to income tax.
A)True
B)False Answer: True
Q5) Resident of Canada or Mexico
Answer: b
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
125 Verified Questions
125 Flashcards
Source URL: https://quizplus.com/quiz/7711
Sample Questions
Q1) Which of the following is not a requirement for an alimony deduction?
A) The payments must be in cash.
B) The payments must cease upon the death of the payee.
C) The payments must extend over at least three years.
D) The payor and payee must not live in the same household at the time of the payments.
E) All of these are requirements for an alimony deduction.
Q2) Barney painted his house which saved him $3,000. According to the realization requirement, Barney must recognize $3,000 of income.
A)True
B)False
Q3) The fact that the accounting method the taxpayer uses to measure income is consistent with GAAP does not assure that the method will be acceptable for tax purposes.
A)True
B)False
Q4) Your client is considering transferring $25,000 from his savings account in a local bank paying 2% interest to a bank in Mexico City fully-insured bank paying 3%. What do you advise?
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) Gold Company was experiencing financial difficulties, but was not bankrupt or insolvent. The National Bank, which held a mortgage on other real estate owned by Gold, reduced the principal from $110,000 to $85,000. The bank had made the loan to Gold when it purchased the real estate from Silver, Inc. Pink, Inc., the holder of a mortgage on Gold's building, agreed to accept $40,000 in full payment of the $55,000 due. Pink had sold the building to Gold for $150,000 that was to be paid in installments over 8 years. As a result of the above, Gold must:
A) Include $40,000 in gross income.
B) Reduce the basis in its assets by $40,000.
C) Include $25,000 in gross income and reduce its basis in its assets by $15,000.
D) Include $15,000 in gross income and reduce its basis in the building by $25,000.
E) None of these.
Q2) 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
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) Trade or business expenses of a self-employed taxpayer should be treated as:
A) Deductible for AGI on Schedule E.
B) A deduction from AGI.
C) Deductible for AGI on Schedule C.
D) An itemized deduction if not reimbursed.
E) None of the above.
Q2) A vacation home at the beach which is rented for 200 days and used personally for 16 days is classified in the personal/rental use category.
A)True
B)False
Q3) During the year, Jim rented his vacation home for 200 days and lived in it for 19 days. During the remaining days, the vacation home was available for rental use. Is the vacation home subject to the limitation on the deductions of a personal/rental vacation home?
Q4) The cash method can always be used by a corporation even if inventory and cost of goods sold are a significant income producing factor in the business.
A)True
B)False
Q5) Under what circumstance can a bribe be deducted?
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) If an account receivable written off during a prior year is subsequently collected during the current year, the amount collected must be included in the gross income of the current year to the extent it created a tax benefit in the prior year.
A)True
B)False
Q2) If an election is made to defer deduction of research expenditures, the amortization period is based on the expected life of the research project if less than 60 months.
A)True
B)False
Q3) In 2017, Amos had AGI of $50,000. Amos also had a diamond ring stolen which cost $20,000 and was worth $17,000 at the time of the theft. He itemized deductions on last year's tax return. In 2018, Amos recovered $17,000 from the insurance company. Therefore, he must include $11,900 in gross income on the tax return for the current year.
A)True
B)False
Q4) Discuss the tax treatment of non-reimbursed losses of an employee in connection with a trade or business.
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
120 Verified Questions
120 Flashcards
Source URL: https://quizplus.com/quiz/7715
Sample Questions
Q1) Maple Company purchases new equipment (7-year MACRS property) on January 10, 2018, at a cost of $430,000. Maple also purchases new machines (5-year MACRS property) on July 19, 2018 at a cost of $290,000. Maple wants to maximize its MACRS deductions? assume no taxable income limitations apply. What is Maple's total MACRS deduction for 2018?
A) $119,447.
B) $560,000.
C) $617,148.
D) $720,000.
Q2) The maximum cost recovery method for all personal property under MACRS is 150% declining balance.
A)True
B)False
Q3) On June 1, 2018, Gabriella purchased a computer and peripheral equipment (five-year property) for $25,000. She used the assets 40% for business, 50% for the production of income, and 10% for personal use. These are the only assets Gabriella purchased during the current year. Determine her total cost recovery deduction for the current year.
Q4) 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
153 Verified Questions
153 Flashcards
Source URL: https://quizplus.com/quiz/7716
Sample Questions
Q1) In the case of an office in the home deduction, the exclusive business use test does not apply when the home is used as a daycare center.
A)True
B)False
Q2) Frank established a Roth IRA at age 25 and contributed a total of $131,244 to it over 38 years. The account is now worth $376,000. How much of these funds can Frank withdraw tax-free?
A) $0
B) $131,244
C) $244,756
D) $376,000
E) None of the above
Q3) Under the simplified method, the maximum office in the home deduction allowed is the greater of $1,500 or the office square feet × $5.
A)True
B)False
Q4) For tax purposes, "travel" is a broader classification than "transportation."
A)True
B)False
11
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) 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) For all of the current year, Randy (a calendar year taxpayer) allowed the Salvation Army to use a building he owns rent-free. The building normally rents for $24,000 a year. Randy will be allowed a charitable contribution deduction this year of $24,000.
A)True
B)False
Q3) Maria traveled to Rochester, Minnesota, with her son, who had surgery at the Mayo Clinic. Her son stayed at the clinic for the duration of his treatment. She paid airfare of $300 and $50 per night for lodging. The cost of Maria's airfare and lodging cannot be included in determining her medical expense deduction.
A)True
B)False
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) Jackson Company incurs a $50,000 loss on a passive activity during the year. The company has active income of $34,000 and portfolio income of $24,000. If Jackson is a personal service corporation, it may deduct $34,000 of the passive activity loss.
A)True
B)False
Q2) Ramon incurred $83,100 of interest expense related to his investments this year. His investment income included $34,500 of interest and a $37,500 net capital gain on the sale of securities. Ramon has asked you to compute the amount of his deduction for investment interest, taking into consideration any options he might have. What is the maximum amount of Ramon's investment interest expense deduction in the current year?
A) $19,500.
B) $34,500.
C) $72,000.
D) $83,100.
E) None of the above.
Q3) Identify how the passive activity loss rules broadly classify various types of income and losses. Provide examples of each category.
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
111 Verified Questions
111 Flashcards
Source URL: https://quizplus.com/quiz/7719
Sample Questions
Q1) Jermaine and Kesha are married, file a joint tax return, have AGI of $82,500, and have two children. Devona is beginning her freshman year at State University during Fall 2018, and Arethia is beginning her senior year at Northeast University during Fall 2018 after having completed her junior year during the spring of that year. Both Devona and Arethia are claimed as dependents on their parents' tax return. Devona's qualifying tuition expenses and fees total $4,000 for the fall semester, while Arethia's qualifying tuition expenses and fees total $6,200 for each semester during 2018. Full payment is made for the tuition and related expenses for both children during each semester. The American Opportunity credit available to Jermaine and Kesha for 2018 is:
A) $2,500.
B) $3,000.
C) $5,000.
D) $6,000.
Q2) The earned income credit, a form of a negative income tax, is a refundable credit.
A)True
B)False
Q3) How does the FICA tax compare to the self-employment tax? How are these two taxes similar and how do they differ?
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) If a taxpayer reinvests the net proceeds (amount received - related expenses) received in an involuntary conversion in qualifying replacement property within the statutory time period, it is possible to defer the recognition of the realized gain.
A)True
B)False
Q2) Betty owns a horse farm with 500 acres of land (adjusted basis of $600,000). Fifty acres of the land are condemned by the state for $400,000 in order to build a municipal stadium. Since the fair market value of Betty's farm is significantly decreased by the proximity to the future stadium, the state awards Betty $300,000 in severance damages. Betty does not use the $300,000 to restore the usefulness of the farm and all of the $700,000 ($400,000 +$300,000) proceeds are invested in the stock market. What is her recognized gain or loss associated with the receipt of the severance damages?
A) $0
B) $100,000
C) $300,000
D) $340,000
E) None of the above
Q3) Discuss the treatment of losses from involuntary conversions.
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) Annabelle is a "trader" in securities. She works for a national securities firm. She occasionally buys and sells securities for her personal account. On May 10, 2017, she purchased 100 shares of Acorn, Inc. common stock for a total of $40,000. She sold all of those shares for a total of $46,000 on July 11, 2018. What was the amount and nature of her gain or loss from this transaction? What could she have done to change this result?
Q2) Assume a building is subject to § 1250 depreciation recapture because bonus depreciation [§ 168(k)]was used. The building is destroyed in a hurricane and this is the taxpayer's only casualty or theft for the year. In which of the following situations could there be a § 1250 depreciation recapture gain?
A) There is a loss because the insurance recovery is less than the adjusted basis.
B) There is a gain because the insurance recovery exceeds the adjusted basis.
C) Because of the length of time the building has been held, there is no remaining additional depreciation.
D) There is no insurance recovery and the adjusted basis of the building is greater than zero.
E) None of the above.
Q3) May an individual that has purchased a patent be a holder of that patent?
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) Susan, a single taxpayer, owns and operates a bakery (as a sole proprietorship). The business is not a specified services business. In 2018, the business pays $60,000 in W-2 wages, has $150,000 of qualified property, and $200,000 in net income (all of which is qualified business income). Susan also has a part-time job earning wages of $11,000, receives $3,000 of interest income, and will take the standard deduction. What is Susan's qualified busine income deduction?
Q2) Tammy has $200,000 of QBI from her neighborhood clothing store (a sole proprietorship).Tammy's proprietorship paid $30,000 in W-2 wages and has $20,000 of qualified property.Tammy's spouse earned $50,000 of wages as an employee, they earned $20,000 of interest income during the year, and will be filing jointly.What is their QBI deduction for 2018?
A) $-0-.
B) $40,000.
C) $50,000.
D) $54,000.
E) None of the above.
Q3) How does property used in a qualified trade or business factor into the QBI deduction calculation? What types of property are considered for the QBI deduction?
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) Which of the following statements regarding a 52-53 week tax year is correct?
A) The year-end must be the same day of the week in all years.
B) The year cannot contain more than 366 calendar days.
C) Every four years, there will be only 51 weeks.
D) The year cannot end on a Sunday.
E) None of the above.
Q2) Under the percentage of completion method, if the actual costs are the estimated costs, the taxpayer must pay interest on the underpayment of prior years' taxes.
A) greater than
B) less than
C) equal to or greater than
D) equal to
E) None of the above
Q3) A doctor's incorporated medical practice may end the last day of any month of the year.
A)True
B)False
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) In the current year, Red Corporation (a calendar year C corporation), which owns stock in Blue Corporation, had net operating income of $200,000 for the year. Blue pays Red a dividend of $40,000. Red takes a dividends received deduction of $20,000. Which of the following statements is correct?
A) Red owns 80% of Blue Corporation.
B) Red owns 20% or more, but less than 80% of Blue Corporation.
C) Red owns 80% or more of Blue Corporation.
D) Red owns less than 20% of Blue Corporation.
E) None of the above.
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) Wade and Paul form Swan Corporation with the following investments. Wade transfers machinery (basis of $40,000 and fair market value of $100,000), while Paul transfers land (basis of $20,000 and fair market value of $90,000) and services rendered (worth $10,000) in organizing the corporation. Each is issued 25 shares in Swan Corporation. With respect to the transfers:
A) Wade has no recognized gain? Paul recognizes income/gain of $80,000.
B) Neither Wade nor Paul has recognized gain or income on the transfers.
C) Swan Corporation has a basis of $30,000 in the land transferred by Paul.
D) Paul has a basis of $30,000 in the 25 shares he acquires in Swan Corporation.
E) None of the above.
Q2) When depreciable property is transferred to a controlled corporation under § 351, any recapture potential disappears and does not carry over to the corporation.
A)True
B)False
Q3) Basis of appreciated property transferred minus boot received (including liabilities transferred) plus gain recognized equals basis of stock received in a § 351 transfer.
A)True
B)False
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
185 Verified Questions
185 Flashcards
Source URL: https://quizplus.com/quiz/7726
Sample Questions
Q1) Provide a brief outline on computing current E & P.
Q2) Julian, Berta, and Maria own 400 shares, 400 shares, and 200 shares, respectively, in Caramel Corporation (E & P of $750,000). Berta is Julian's sister, and Maria is Julian's aunt. Caramel Corporation redeems all of Julian's stock for $420,000. Julian paid $200 a share for the stock five years ago. Julian continued to serve on Caramel's board of directors after the redemption. With respect to the redemption:
A) Dividend income of $340,000.
B) Dividend income of $420,000.
C) Long-term capital gain of $340,000.
D) Long-term capital gain of $420,000.
E) None of the above.
Q3) Reginald and Roland (Reginald's son) each own 50% of the stock of Robin Corporation. Reginald's stock interest is entirely redeemed by Robin Corporation. Two years later, Reginald loans Robin Corporation $250,000. The loan to Robin Corporation does not constitute a prohibited interest for purposes of the family attribution waiver.
A)True
B)False
Q4) Briefly define the term "earnings and profits."
Page 21
To view all questions and flashcards with answers, click on the resource link above.
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) Pursuant to a complete liquidation, Rust Corporation distributes to its shareholders land with a basis of $150,000 and a fair market value of $400,000. The land is subject to a liability of $300,000. What is Rust's recognized gain on the distribution?
A) $0.
B) $100,000.
C) $150,000.
D) $250,000.
E) None of the above.
Q2) In corporate reorganizations, if an acquiring corporation is using property other than stock as consideration, it may recognize gains but not losses on the transaction.
A)True
B)False
Q3) What are the tax consequences of a § 332 liquidation to the parent corporation, subsidiary corporation, and minority shareholder?
Q4) Compare the sale of a corporation's assets with a sale of its stock from the perspective of the seller.
Q5) 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
248 Verified Questions
248 Flashcards
Source URL: https://quizplus.com/quiz/7728
Sample Questions
Q1) In the current year, the DOE LLC received revenues of $200,000 and paid the following amounts: $50,000 of business expenses (rent, utilities, wages, depreciation, etc.), a $40,000 guaranteed payment (for services) to 50% member Dave, $10,000 to member Ethan for consulting services, and $10,000 as a distribution to member Olivia. In addition, the LLC earned $2,000 of tax-exempt interest income during the year. Dave is the managing member of the LLC. Dave's basis in his LLC interest was $50,000 at the beginning of the year, and includes a $12,000 share of LLC liabilities. At the end of the year, his share of the LLC's liabilities was $20,000.
a. How much income must Dave report for the tax year and what is the character of the income?
b. What is Dave's basis in his LLC interest at the end of the tax year?
c. On what income will Dave's self-employment tax be calculated?
d. What is the maximum amount Dave might be able to deduct for this business under [section symbol] 199A? What additional information would Dave need to make this calculation?
Q2) A partner will have the same profit-sharing, loss-sharing, and capital-sharing ownership percentages.
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) Advise your client how income, expenses, gain, and losses are allocated to shareholders of an S corporation.
Q2) Which statement is incorrect with respect to an S shareholder's consent?
A) Both husband and wife must consent if one owns the stock as community property.
B) An S election requires a consent from all of the S corporation's shareholders.
C) A consent must be in writing.
D) None of the above statements is incorrect.
Q3) Which, if any, of the following can be eligible shareholders of an S corporation?
A) A Roth IRA.
B) Partnership.
C) A non-U.S. corporation.
D) A nonqualifying trust.
E) None of the above can own stock.
Q4) The exclusion of gain on disposition of small business stock is not available on disposition of S corporation stock.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
24
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) Gallery, a public charity, reports annual gross receipts of $100,000 and has total assets of $425,000. It should file a(n):
A) Form 990.
B) Form 990-PF.
C) Form 990-N (e-Postcard).
D) Form 990-EZ.
Q2) Certain § 501(c)(3) exempt organizations are permitted to engage in lobbying activities in the same manner as a C corporation.
A)True
B)False
Q3) Some of the excise taxes which may be imposed on private foundations may be imposed on both the private foundation and the foundation manager.
A)True
B)False
Q4) To be classified as a private foundation, the exempt status of an organization can be provided under either § 501(c) (1) or § 501(c)(3).
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
25
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) State-level NOL.
Q2) In computing the property factor, property owned by the corporation typically is valued at its ________________, but without adjusting for depreciation.
Q3) 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.
Q4) Typically exempt from the sales/use tax base is the purchase of prescription medicines by an individual.
A)True B)False
Q5) Almost all of the states assess some form of consumer-level sales/use tax.
A)True B)False
Q6) Deduction for advertising expenditures.
Q7) A meal eaten at a restaurant while conducting business.
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
146 Verified Questions
146 Flashcards
Source URL: https://quizplus.com/quiz/7732
Sample Questions
Q1) In international corporate income taxation, what are the uses of the "sourcing rules" in computing Federal taxable income?
Q2) U.S. taxpayers earning income outside the United States.
Q3) WaterCo, a domestic corporation, purchases inventory for resale from unrelated distributors outside the U.S. It resells this inventory to U.S. customers, with title passing inside the United States. What is the sourcing of WaterCo's inventory sales income?
A) 100% U.S. source.
B) 100% foreign source.
C) 50% U.S. source and 50% foreign source.
D) 50% foreign source and 50% sourced based on location of manufacturing assets.
Q4) A business operation that accounts for profits and losses using its functional currency.
Q5) 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.
Q6) Individual who is not a U.S. citizen or resident.
Q7) A CFC's profits from sales of goods and services.
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
184 Verified Questions
184 Flashcards
Source URL: https://quizplus.com/quiz/7733
Sample Questions
Q1) The IRS can waive the penalty for a substantial understatement of a tax liability if the taxpayer shows ________________for the position taken on the tax return.
Q2) A tax professional needs to know how the IRS is structured and how it works to carry out its mission. Evaluate this statement.
Q3) Maria did not pay her Federal income tax on time. When she eventually filed the return, she reported a balance due.
Compute Maria's failure to file penalty in each of the following cases. Disregard any failure to pay penalty.
a. Three months late, $500 additional tax due.
b. Four months late, $2,000 additional tax due.
c. Ten months late, $10,000 additional tax due.
d. Four months late due to fraud by Maria, $10,000 additional tax due.
e. Fifteen months late due to fraud by Maria, $10,000 additional tax due.
Q4) Describe the potential outcomes to a party who provides information to the IRS under the informant or whistleblower program.
Q5) In connection with the taxpayer penalty for substantial understatement of tax liability, what defenses (if any) are available?
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) At the time of her death, Megan was involved in the following.
? Owned an insurance policy on the life of her father with a replacement cost of $250,000 and maturity value of $800,000. The designated beneficiary of the policy is Megan's estate.
? Was an equal tenant in common with her brother in a tract of land worth $800,000. The land was inherited from their grandmother 10 years ago when it had a value of $200,000.
? Was a joint tenant with her two sisters in stock worth $1,500,000. The stock was inherited from their grandmother 10 years ago when it had a value of $500,000.
As to these transactions, Megan's gross estate must include:
A) $250,000.
B) $1,150,000.
C) $1,400,000.
D) $2,150,000.
E) None of the above.
Q2) Under her father's will, Faith is to receive 10,000 shares of GE common stock. Eight months after her father's death, Faith disclaims the 10,000 shares.
Q3) State death tax imposed on the estate.
To view all questions and flashcards with answers, click on the resource link above.
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) Which of the following restrictions applies concerning distributions to trust beneficiaries?
A) Special allocations are not allowed under Subchapter J.
B) Special allocations are allowed, but only in the trust's termination year.
C) Special allocations are allowed, but only for portfolio income items.
D) Special allocations of income types are allowed, assuming that they carry a substantial economic effect.
Q2) Usually, a beneficiary takes a carryover basis when a trust distributes a non-cash asset.
A)True
B)False
Q3) Jose is subject to the top marginal Federal income tax rates. Carlita is considering establishing a trust in which Jose would be an income beneficiary. Considering only income tax consequences, Jose should be designated as:
A) A first-tier beneficiary.
B) A second-tier beneficiary.
C) Only a remainder beneficiary.
D) Both a first- and a second-tier beneficiary.
Q4) The entity typically can choose any fiscal tax year.
To view all questions and flashcards with answers, click on the resource link above. Page 30