Partnership Taxation
Study Guide Questions
Course Introduction
Partnership Taxation explores the federal income tax laws that apply to partnerships and their partners, focusing on the formation, operation, and liquidation of partnerships. The course examines key topics such as the allocation of income, deductions, and credits among partners; basis calculations; contributions and distributions of property; and the impact of transactions between partners and their partnership. Emphasis is placed on Subchapter K of the Internal Revenue Code, the treatment of special allocations, and the complexities of partner tax liability. Students will develop a practical understanding of how partnership tax rules affect business planning and decision-making.
Recommended Textbook
South Western Federal Taxation 2018 Comprehensive 41st Edition by William H. Hoffman
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Chapter 1: An Introduction to Taxation and Understanding
the Federal Tax Law
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Q1) A safe and easy way for a taxpayer to avoid local and state sales taxes is to make the purchase in a state that levies no such taxes.
A)True
B)False
Answer: False
Q2) Upon audit by the IRS,Faith is assessed a deficiency of $40,000 of which $25,000 is attributable to negligence.The 20% negligence penalty will apply to $25,000.
A)True
B)False
Answer: True
Q3) Jason's business warehouse is destroyed by fire.As the insurance proceeds exceed the basis of the property,a gain results.If Jason shortly reinvests the proceeds in a new warehouse,no gain is recognized due to the application of the wherewithal to pay concept.
A)True
B)False
Answer: True
Q4) Excise tax on tobacco
Answer: i
3
Chapter 2: Working With the Tax Law
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Q1) Three judges will normally hear each U.S.Tax Court case.
A)True
B)False
Answer: False
Q2) Which items tell taxpayers the IRS's reaction to certain court decisions?
A)Notices
B)Revenue Procedures
C)Revenue Rulings
D)Actions on Decisions
E)Legislative Regulations
Answer: D
Q3) A tax professional need not worry about the relative weight of authority within the various tax law sources.
A)True
B)False Answer: False
Q4) Technical Advice Memoranda deal with completed transactions.
A)True
B)False
Answer: True
Page 4
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Chapter 3: Computing the Tax
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Sample Questions
Q1) A qualifying child cannot include:
A)A nonresident alien.
B)A married son who files a joint return.
C)A daughter who is away at college.
D)A brother who is 28 years of age and disabled.
E)A grandmother.
Answer: E
Q2) Under the income tax formula,a taxpayer must choose between deductions for AGI and the standard deduction.
A)True
B)False
Answer: False
Q3) Derek,age 46,is a surviving spouse.If he has itemized deductions of $12,900 for 2017,Derek should not claim the standard deduction.
A)True
B)False Answer: True
Q4) Average income tax rate
Answer: b
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Chapter 4: Gross Income: Concepts and Inclusions
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Q1) The annual increase in the cash surrender value of a life insurance policy:
A)Is taxed according to the original issue discount rules.
B)Is not included in gross income because the policy must be surrendered to receive the cash surrender value.
C)Reduces the deduction for life insurance expense.
D)Is exempt because it is life insurance proceeds.
E)None of these.
Q2) Ted earned $150,000 during the current year.He paid Alice,his former wife,$75,000 in alimony.Under these facts,the tax is paid by the person who benefits from the income rather than the person who earned the income.
A)True
B)False
Q3) Norma's income for 2017 is $27,000 from part-time work and $9,000 of Social Security benefits.Norma is not married.A portion of her Social Security benefits must be included in her gross income.
A)True
B)False
Q4) How does the taxation of Social Security benefits differ from the taxation of an annuity purchased by the taxpayer?
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Chapter 5: Gross Income: Exclusions
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Q1) The taxpayer was in the 35% marginal tax bracket in 2016 and deducted $15,000 in state income taxes as an itemized deduction that year.In 2017,he filed his 2016 state income tax return and received a $5,000 refund of state income taxes paid in 2016.His marginal tax rate in 2017 was 15%.What was the taxpayer's Federal tax benefit from the overpayment of his 2016 state income tax?
Q2) Jack received a court award in a civil libel and slander suit against National Gossip.He received $120,000 for damages to his professional reputation,$100,000 for damages to his personal reputation,and $50,000 in punitive damages.Jack must include in his gross income as a damage award:
A)$0.
B)$100,000.
C)$120,000.
D)$270,000.
E)None of these.
Q3) Workers' compensation benefits are included in gross income if the employer also pays the employee while the employee is recovering from his or her injury.
A)True
B)False
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Chapter 6: Deductions and Losses: in General
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Q1) In applying the $1 million limit on deducting executive compensation,what corporations are subject to the deduction limit? What executives are covered?
Q2) Aaron,a shareholder-employee of Pigeon,Inc.,receives a $300,000 salary.The IRS classifies $100,000 of this amount as unreasonable compensation.The effect of this reclassification is to decrease Aaron's gross income by $100,000 and increase Pigeon's gross income by $100,000.
A)True
B)False
Q3) Ordinary and necessary business expenses,other than cost of goods sold,of an illegal drug trafficking business do not reduce taxable income.
A)True
B)False
Q4) Are all personal expenses disallowed as deductions?
Q5) Hobby activity expenses are deductible from AGI to the extent of hobby income.Such expenses not in excess of hobby income are not subject to the 2%-of-AGI floor.
A)True
B)False
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Chapter 7: Deductions and Losses: Certain Business
Expenses and Losses
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Q1) Discuss the treatment,including the carryback and carryforward periods,of casualty losses incurred with personal use property.
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) What are the three methods of handling research and experimental expenditures incurred in a trade or business? Under what circumstances would you choose each?
Q4) A theft loss of investment property is an itemized deduction not subject to the 2%-of-AGI floor.
A)True
B)False
Q5) When a nonbusiness casualty loss is spread between two taxable years,the loss in the second year is reduced by 10% of adjusted gross income for the first year.
A)True
B)False
Q6) How is qualified production activities income (QPAI) calculated?
Page 9
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Chapter 8: Depreciation, cost Recovery, amortization, and Depletion
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Q1) On May 30,2016,Jane purchased a factory building to use for her business.In August 2017,Jane paid $300,000 for improvements to the building.Determine Jane's total deduction with respect to the building improvements for 2017.
A)$2,889
B)$4,173
C)$4,815
D)$25,000
E)None of the above
Q2) Hans purchased a new passenger automobile on August 17,2017,for $30,000.During the year the car was used 40% for business and 60% for personal use.Determine his cost recovery deduction for the car for 2017.
A)$500
B)$1,000
C)$1,224
D)$1,500
E)None of the above
Q3) Discuss the reason for the inclusion amount with respect to leased automobiles.
Q4) Discuss the tax implications of a seller allocating the selling price to goodwill or a covenant not to compete.
Page 10
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Chapter 9: Deductions: Employee and
Self-Employed-Related Expenses
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Q1) In which,if any,of the following situations is the automatic mileage available?
A)A limousine to be rented by the owner for special occasions (e.g., weddings, high school proms).
B)The auto belongs to taxpayer's mother.
C)One of seven cars used to deliver pizzas.
D)MACRS statutory percentage method has been claimed on the automobile.
E)None of these.
Q2) Dave is the regional manager for a national chain of auto-parts stores and is based in Salt Lake City.When the company opens new stores in Boise,Dave is given the task of supervising their initial operation.For three months,he works weekdays in Boise and returns home on weekends.He spends $350 returning to Salt Lake City but would have spent $410 had he stayed in Boise for the weekend.As to the weekend trips,how much,if any,qualifies as a deduction?
A)$0, since the trips are personal and not work related.
B)$0, since Dave's tax home has changed from Salt Lake City to Boise.
C)$60
D)$350
E)$410
Q3) Mixed use (both business and pleasure) foreign travel
Q4) Time test (for moving expenses) waived
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Chapter 10: Deductions and Losses: Certain Itemized Deductions
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Q1) Ronaldo contributed stock worth $12,000 to the Children's Protective Agency,a qualified charity.He acquired the stock 20 months ago for $7,000.He may deduct $7,000 as a charitable contribution deduction (subject to percentage limitations).
A)True
B)False
Q2) Gambling losses may be deducted to the extent of the taxpayer's gambling winnings.Such losses are subject to the 2%-of-AGI floor for miscellaneous itemized deductions.
A)True
B)False
Q3) A taxpayer may not deduct the cost of new curbing (relative to a personal residence),even if the construction is required by the city and the curbing provides an incidental benefit to the public welfare.
A)True
B)False
Q4) A phaseout of certain itemized deductions applies for all taxpayers who choose to itemize their deductions.
A)True
B)False
Page 12
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Chapter 11: Investor Losses
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Q1) Discuss the treatment given to suspended passive activity losses and credits.What happens to an activity's unused losses and credits when the activity is sold?
Q2) List the taxpayers that are subject to the passive activity loss rules and summarize the general impact of these rules on these taxpayers.
Q3) Judy owns a 20% interest in a partnership (not real estate) in which her at-risk amount was $35,000 at the beginning of the year.The partnership borrowed $50,000 on a recourse note and made a $40,000 profit during the year.Her at-risk amount at the end of the year is $43,000.
A)True
B)False
Q4) Wayne owns a small apartment building that produces a $45,000 loss during the year.His AGI before considering the rental loss is $85,000.Because Wayne is an active participant with respect to the rental activity,he may deduct the $45,000 loss.
A)True
B)False
Q5) Material participation.
Q6) Active participation.
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Chapter 12: Tax Credits and Payments
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Q1) The tax benefits resulting from tax credits and tax deductions are affected by the tax rate bracket of the taxpayer.
A)True
B)False
Q2) Ahmad is considering making a $10,000 investment in a venture which its promoter promises will generate immediate tax benefits for him.Ahmad,who normally itemizes his deductions,is in the 28% marginal tax bracket.If the investment is of a type where the taxpayer may claim either a tax credit of 25% of the amount of the expenditure or an itemized deduction for the amount of the investment,what treatment normally would be most beneficial to Ahmad and by how much will Ahmad's tax liability decline because of the investment?
A)$0, take neither the itemized deduction nor the tax credit.
B)$2,500, take the tax credit.
C)$2,800, take the itemized deduction.
D)Both options produce the same benefit.
E)None of the above.
Q3) All foreign taxes qualify for the foreign tax credit.
A)True
B)False
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Chapter 13: Property Transactions: Determination of Gain or
Loss, basis Considerations, and Nontaxable Exchanges
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Q1) Terry exchanges real estate (acquired on August 25,2011) held for investment for other real estate to be held for investment on September 1,2017.None of the realized gain of $10,000 is recognized,and Terry's adjusted basis for the new real estate is a carryover basis of $80,000.Consequently,Terry's holding period for the new real estate begins on August 25,2011.
A)True
B)False
Q2) For disallowed losses on related-party transactions,who has the right of offset?
Q3) The carryover basis to a donee for property received by gift can be an amount greater than the donor's adjusted basis.
A)True
B)False
Q4) Jake exchanges an airplane used in his business for a smaller airplane to be used in his business.His adjusted basis for the airplane is $325,000 and the fair market value is $310,000.The fair market value of the smaller airplane is $300,000.In addition,Jake receives cash of $10,000.Calculate Jake's realized and recognized gain or loss and his adjusted basis for the assets received.
Q5) Discuss the treatment of losses from involuntary conversions.
Q6) What is the general formula for calculating the adjusted basis of property?
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Chapter 14: Property Transactions, capital Gains and
Losses, sec1231, and Recapture Provisions
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Q1) An individual had the following gains and losses during 2017 on property held for the long-term holding period: sale of Orange common stock ($8,000 gain); sale of real property used in the taxpayer's business ($1,800 loss); destruction of real property used in the taxpayer's business by fire ($1,000 loss).Which of the following statements is correct?
A)The fire loss would reduce the real property sale loss.
B)The fire loss would reduce the stock sale gain.
C)The sale of real property loss would be netted against the stock sale gain.
D)The sale of real property is a § 1231 loss.
E)None of the above.
Q2) Personal use property casualty gains and losses are not subject to the § 1231 rules. A)True B)False
Q3) Martha is unmarried with one dependent and files as head of household.She had 2017 taxable income of $45,000 which included $16,000 of 0%/15%/20% net long-term capital gain.What is her tax on taxable income using the alternative tax on net long-term capital gain method?
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Chapter 15: Alternative Minimum Tax
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Q1) The deduction for personal and dependency exemptions is allowed for regular income tax purposes,but is disallowed for AMT purposes.This results in a positive AMT adjustment.
A)True
B)False
Q2) 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?
Q3) Jackson sells qualifying small business stock for $125,000 (adjusted basis of $105,000) in 2017 (the stock was acquired in 2011).In calculating gross income for regular income tax purposes,he excludes all of his realized gain of $20,000.The $20,000 exclusion is a preference in calculating Jackson's AMTI.
A)True
B)False
Q4) What is the relationship between the regular income tax liability and the TMT?
Q5) What is the purpose of the AMT exemption amount? What is the maximum amount for each filing status for an individual taxpayer and for a corporate taxpayer?
Q6) Do AMT adjustments and AMT preferences increase or decrease AMTI?
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Chapter 16: Accounting Periods and Methods
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Q1) The ability of the CPA to timely prepare a tax return is a justification for the partnership's use of a particular tax year.
A)True
B)False
Q2) Sandstone,Inc.,has consistently included some factory overhead as a current expense,rather than as a cost of producing goods.As a result,the beginning inventory for 2017 is understated by $40,000.If Sandstone voluntarily changes accounting methods effective January 1,2017,the positive adjustment to the inventory is a § 481 adjustment and $10,000 must be added to taxable income for each year 2017,2018,2019,and 2020.
A)True
B)False
Q3) 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
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Chapter 17: Corporations: Introduction and Operating Rules
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Q1) Explain the rules regarding the accounting periods available to corporate taxpayers.
Q2) Which of the following statements is incorrect regarding the taxation of C corporations?
A)Similar to those applicable to individuals, the marginal tax rate brackets for corporations are adjusted for inflation.
B)Taxable income of a personal service corporation is taxed at a flat rate of 35%.
C)A tax return must be filed whether or not the corporation has taxable income.
D)The highest corporate marginal tax rate is 39%.
E)None of the above.
Q3) A corporation must file a Federal income tax return even if it has no taxable income for the year.
A)True
B)False
Q4) 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
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Chapter 18: Corporations: Organization and Capital Structure
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Q1) Ruth transfers property worth $200,000 (basis of $60,000) to Goldfinch Corporation.In return,she receives 80% of its stock (worth $180,000) and a long-term note,executed by Goldfinch and made payable to Ruth (worth $20,000).Ruth will recognize no gain on the transfer.
A)True
B)False
Q2) Joyce,a single taxpayer,transfers property (basis of $120,000 and fair market value of $60,000) to Wren Corporation in exchange for shares of § 1244 stock.As the transfer qualifies under § 351,Joyce takes a $120,000 basis in the Wren stock.In the current year,Joyce sells the Wren Corporation stock for $40,000.What are the consequences of the sale to Joyce?
Q3) Lark City donates land worth $300,000 and cash of $100,000 to Orange Corporation as an inducement to locate in the city.Four months later,Orange purchases additional land and a building at a cost of $500,000 and moves its operations to Lark City.Ann,the sole shareholder,contributes equipment (basis of $70,000 and fair market value of $200,000) to help Orange in its new operations.What are the tax consequences of these transfers to Orange Corporation?
Q4) What is the rationale underlying the tax deferral treatment available under § 351?
Page 20
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Chapter 19: Corporations: Distributions Not in Complete Liquidation
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Q1) As a result of a redemption,a shareholder's interest (direct and indirect) in the corporation decreased from 80% to 55%.The redemption qualifies for sale or exchange treatment as a disproportionate redemption.
A)True
B)False
Q2) If a stock dividend is taxable,the shareholder's basis in the newly received shares is equal to the fair market value of the shares received in the distribution.
A)True
B)False
Q3) Which of the following statements is incorrect with respect to determining current E & P?
A)All tax-exempt income should be added back to taxable income.
B)Dividends received deductions should be added back to taxable income.
C)Current year charitable contributions in excess of the 10% of taxable income limit should be subtracted from taxable income.
D)Federal income tax refunds should be added back to taxable income.
E)None of the above statements are incorrect.
Q4) Excess capital loss in year incurred.
Page 21
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Chapter 20: Corporations: Distributions in Complete
Liquidation and an Overview of Reorganization
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Q1) Explain whether shareholders are exempted from gain/loss recognition in nontaxable corporate reorganization or the gain/loss recognition is merely postponed.If postponed,what is the vehicle for ensuring the postponed gain/loss will be recognized in the future?
Q2) Legal dissolution under state law is required for a liquidation to be complete for tax purposes.
A)True
B)False
Q3) The basis for the acquiring corporation in the target's assets is increased by any gain recognized by the target.
A)True
B)False
Q4) 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
Q5) Compare the sale of a corporation's assets with a sale of its stock from the perspective of the seller.
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Chapter 21: Partnerships
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Q1) Organizational costs
Q2) An example of the "aggregate concept" underlying partnership taxation is the fact that the partners (rather than the partnership) pay tax on partnership income.
A)True
B)False
Q3) Kristie is a 25% member in the KLM LLC.At the end of the year,KLM has accounts payable of $60,000 (recourse to the LLC but not guaranteed by the LLC members),and a nonrecourse debt related to real estate of $300,000 (that debt meets the at risk limitation requirements).In addition,Kristie personally guaranteed a $50,000 liability for KLM's equipment purchases.Which one of the following shows the information that should be reported on Kristie's Schedule K-1 for the year?
A)$15,000 recourse debt, $75,000 qualified nonrecourse debt.
B)$90,000 nonrecourse debt.
C)$90,000 nonrecourse debt, $12,500 recourse debt.
D)$65,000 recourse debt, $75,000 qualified nonrecourse debt.
E)$50,000 recourse debt, $15,000 nonrecourse debt, $75,000 qualified nonrecourse debt.
Q4) Foreign tax credit vs.deduction
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Chapter 22: S Corporations
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Q1) Which item does not appear on Schedule K of Form 1120S?
A)Intangible drilling costs.
B)Foreign loss.
C)Utilities expense.
D)Recovery of a tax benefit.
E)All of the above items appear on Schedule K.
Q2) Pepper,Inc.,an S corporation,holds a $1 million balance in accumulated E&P.It reports sales revenues of $400,000,taxable interest of $380,000,operating expenses of $250,000,and deductions attributable to the interest income of $140,000.What is Pepper's passive income penalty tax payable,if any?
A)$380,000.
B)$185,000.
C)$40,895.
D)$0.
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.
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Chapter 23: Exempt Entities
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Q1) What are intermediate sanctions and to what types of exempt organizations do they apply?
Q2) The tax consequences to a donor of making a charitable contribution to an exempt organization classified as a private foundation may be less favorable than the tax consequences to a donor of making a charitable contribution to an exempt organization that is a public charity.
A)True
B)False
Q3) Arbor,Inc.,an exempt organization,leases land,building,and machinery to a tenant for a 5-year period.The rent income for the land and building is $400,000 per year and that from the related machinery is $80,000 per year.Expenses incurred by Arbor for the land and building during the year are $60,000,and those for the machinery are $36,000.Net unrelated business income,which includes the above rental income and expenses,is $800,000.Calculate Arbor's unrelated business taxable income.
Q4) Which requirements must be satisfied for an exempt organization to be classified as an unrelated trade or business? Is being classified as an unrelated trade or business good or bad?
Q5) § 501(c)(4) civic league
Q6) Tax on failure to distribute adequate amounts of income
Page 25
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Chapter 24: Multistate Corporate Taxation
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Q1) Which of the following is not immune from state income taxation,even if P.L.86-272 is in effect?
A)Sale of office equipment that is used in the taxpayer's business.
B)Sale of office equipment that constitutes inventory to the purchaser.
C)Sale of a warehouse used in the taxpayer's business.
D)All of the above are protected by P.L. 86-272 immunity provisions.
Q2) Nonbusiness income receives tax-exempt treatment under all state corporate income taxes.
A)True
B)False
Q3) Most of the U.S.states have adopted an alternative minimum tax,similar to the Federal system,in taxing the income of corporations.
A)True
B)False
Q4) A garment purchased by an employee for wear at an office job.
Q5) Carrying a free sample of a product to the customer's premises.
Q6) P.L.86-272 ____________________ (does/does not) create nexus when the sales representative approves a sale at the customer's location.
Q7) An ad valorem property tax is based on the asset's current
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Chapter 25: Taxation of International Transactions
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Q1) A non-U.S.citizen who holds a "green card."
Q2) Foreign tax credit allowed for withholding taxes on payments from foreign sources.
Q3) USCo,a U.S.corporation,purchases inventory from distributors within the U.S.and resells this inventory to customers outside the U.S.,with title passing outside the U.S.Profit on the sale is $10,000.What is the source of the USCo's inventory sales income?
A)$5,000 U.S. source and $5,000 foreign source.
B)$5,000 U.S. source and $5,000 sourced based on location of the pertinent manufacturing assets.
C)$10,000 U.S. source.
D)$10,000 foreign source.
Q4) ForCo,a non-U.S.corporation based in Aldonza,purchases widgets from USCo,Inc.,its U.S.parent corporation.The widgets are sold by ForCo to an unrelated foreign corporation in Aldonza.The income from sale of the widgets by ForCo is Subpart F foreign base company sales income.
A)True
B)False
Q5) Upon repatriation to a CFC,it does not create dividend income.
Q6) Number of foreign tax credit limitation baskets.
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Chapter 26: Tax Practice and Ethics
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183 Verified Questions
183 Flashcards
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Sample Questions
Q1) Currently,the IRS charges a ____________________% interest rate on taxes that the taxpayer underpays.
Q2) Failure to pay a tax.
Q3) With respect to the Small Cases Division of the Tax Court,
A)The taxpayer (but not the IRS) can appeal a contrary judgment.
B)The IRS (but not the taxpayer) can appeal a contrary judgment.
C)Either the IRS or the taxpayer can appeal a contrary judgment.
D)Neither the IRS nor the taxpayer can appeal a contrary judgment.
Q4) The tax penalty imposed on appraisers:
A)Can be as much as 200% of the appraisal fee that was charged.
B)Is waived if the taxpayer also was charged with his/her own valuation penalty.
C)Equals 25% of the appraised value of the property, with a $10,000 minimum penalty.
D)Applies if the appraiser knew that the appraisal would be used in preparing a Federal income tax return.
Q5) The National Taxpayer Advocate reports to:
A)Treasury Secretary.
B)IRS Commissioner.
C)IRS Director of Compliance Analytics.
D)IRS Director of Professional Responsibility.
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Chapter 27: The Federal Gift and Estate Taxes
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167 Verified Questions
167 Flashcards
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Sample Questions
Q1) Manfredo makes a donation of $50,000 to the church where he was baptized in Mexico City.The gift does not qualify as a charitable contribution for Federal income tax purposes.
A)True
B)False
Q2) Cole purchases land for $500,000 and transfers it by gift to his two daughters,Madison and Paige,as equal joint tenants with the right of survivorship.Ten years later,when the land is worth $2,000,000,Madison predeceases Paige.Madison's executor includes none of the value of the land in her gross estate,as she contributed nothing toward its cost.Do you agree?
Q3) Harry pays for the tuition for his niece to attend Drake University.The niece does not qualify as Harry's dependent.
Q4) Homer purchases a U.S.savings bond listing title as: "Homer,payable to Bernice upon Homer's death." Bernice is Homer's sister.
A)No taxable transfer occurs
B)Gift tax applies
C)Estate tax applies
Q5) Future interest
Q6) Community property
Page 29
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Chapter 28: Income Taxation of Trusts and Estates
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167 Verified Questions
167 Flashcards
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Sample Questions
Q1) A ____________________ (first,second,third) -tier distribution is one that the trust agreement requires to be made by the trustee to the income beneficiary.
Q2) The Raja Trust operates a welding business.Its current-year cost recovery deductions properly amount to $75,000.Raja's accounting income was $100,000,of which $40,000 was distributed to first-tier beneficiary Chuck,$25,000 was distributed to second-tier beneficiary Ruby,and $35,000 was accumulated by the trustee.Ruby also received a $25,000 discretionary corpus distribution.Raja's DNI was $80,000.Identify the treatment of Raja's cost recovery deductions.
Q3) A fiduciary's cost recovery deductions are assigned corresponding to the disposition of entity ____________________ income for the year.
Q4) Entity accounting income is controlled by the terms of the ____________________ for an estate or the ____________________ for a trust.
Q5) A decedent created the entity.
Q6) A complex trust is automatically exempt from the Federal AMT. A)True B)False
Q7) A trust whose income is taxed to the donor,not the beneficiaries.
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