Survey of Taxation Pre-Test Questions
Course Introduction
Survey of Taxation provides an introduction to the fundamental concepts and principles of taxation in the United States. The course covers the structure of federal, state, and local tax systems, with a primary focus on individual and business income taxes. Students will explore topics such as tax compliance, tax planning, the role of taxation in the economy, and ethical issues in tax practice. Emphasis is placed on basic tax terminology, the preparation and interpretation of tax returns, and an overview of regulations impacting taxpayers. This course is designed to offer foundational knowledge for future coursework in accounting, business, or law.
Recommended Textbook
MP Fundamentals of Taxation 2015 8th Edition by Ana Cruz
Available Study Resources on Quizplus
15 Chapters
1645 Verified Questions
1645 Flashcards
Source URL: https://quizplus.com/study-set/2907 Page 2
Chapter 1: Introduction to Taxation, the Income Tax
Formula, and Form 1040ez
Available Study Resources on Quizplus for this Chatper
135 Verified Questions
135 Flashcards
Source URL: https://quizplus.com/quiz/57907
Sample Questions
Q1) Which type of tax rate structure is each of the following types of tax: sales,federal income,social security,flat,Medicare?
Answer: Sales tax is proportional,federal income tax is progressive,social security is regressive,flat tax is proportional,Medicare tax is proportional.
Q2) The marginal tax rate is the total tax liability divided by the taxable income.
A)True
B)False
Answer: False
Q3) A tax rate that remains the same as the tax base increases is an example of what kind of tax rate structure?
A) Progressive.
B) Proportional.
C) Regressive.
D) Recessive.
Answer: B
Q4) Circular 230 applies only to paid tax preparers.
A)True
B)False
Answer: True
3
To view all questions and flashcards with answers, click on the resource link above.
Chapter 2: Expanded Tax Formula, Forms 1040a and 1040, and Basic Concepts
Available Study Resources on Quizplus for this Chatper
124 Verified Questions
124 Flashcards
Source URL: https://quizplus.com/quiz/57906
Sample Questions
Q1) The IRS can impose a ________ penalty on the tax due on a return where there is negligence.
A) 5%
B) 75%
C) 20%
D) 25%
Answer: C
Q2) The basic standard deduction in 2014 for a taxpayer,67 and not blind,filing head of household is:
A) $10,650.
B) $7,400.
C) $1,550.
D) $9,100.
Answer: A
Q3) If a married couple files separate returns and one of them itemizes,the other spouse must also itemize.
A)True
B)False
Answer: True
Page 4
To view all questions and flashcards with answers, click on the resource link above.
Chapter 3: Gross Income: Inclusions and Exclusions
Available Study Resources on Quizplus for this Chatper
125 Verified Questions
125 Flashcards
Source URL: https://quizplus.com/quiz/57905
Sample Questions
Q1) A taxpayer must file a Schedule B (Forms 1040A or 1040)if he or she has received taxable interest of $1,550.
A)True
B)False
Answer: True
Q2) For tax purposes,name the three conditions that a transaction must meet for income recognition.
Answer: A transaction is recognized as income on the taxpayer's tax return if it meets three conditions: economic benefit,existence from start to completion,and not exempt from income tax.
Q3) The imputed interest rules apply to the following:
A) Sales of property for $3,000 or less.
B) Sales in which all payments are due in six months or less.
C) Sale of a personal residence.
D) All of these.
Answer: C
Q4) Income can only be realized in money or services.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Adjustments for Adjusted Gross Income
Available Study Resources on Quizplus for this Chatper
109 Verified Questions
109 Flashcards
Source URL: https://quizplus.com/quiz/57894
Sample Questions
Q1) For a taxpayer to be eligible to deduct moving expenses,in addition to the employment test,he or she:
A)Must meet both the time and distance test.
B)Must meet either the time or distance test.
C)Must meet the distance test.
D)Must meet the time test.
Q2) Charde,who is single,had a student loan for qualified education expenses on which interest was due.For 2014,the total interest payments were $2,000.Assuming she has AGI under $65,000,how much may she deduct in arriving at adjusted gross income for 2014?
A)$2,500.
B)$2,000.
C)$1,700.
D)$ 0.
Q3) An eligible educator,in the K through 12 educational system,for purposes of the educator's expense deduction is:
A)A teacher.
B)A counselor.
C)A principal.
D)All of the above.
To view all questions and flashcards with answers, click on the resource link above.
Page 6
Chapter 5: Itemized Deductions
Available Study Resources on Quizplus for this Chatper
113 Verified Questions
113 Flashcards
Source URL: https://quizplus.com/quiz/57893
Sample Questions
Q1) Cynthia makes weekly cash contributions of $30 to her church.She pays by check.Since her annual contributions to the church are more than $250,she must obtain a written acknowledgment from the church to support her contribution deduction.
A)True
B)False
Q2) In 2014,Allen's pleasure boat was destroyed by a flood.He had purchased the boat in 2011 for $45,000.On what form(s)will Allen report this loss?
A)Form 4684,Casualties and Thefts,and Schedule A,Itemized Deductions.
B)Form 4684,Casualties and Theft,and Schedule D,Capital Gains and Losses.
C)Form 4797,Sales of Business Property and Involuntary Conversions,and Schedule D,Capital Gains and Losses.
D)On the first page of Form 1040.
Q3) In 2013,Roxanne's nephew was her dependent.For 2014,he no longer qualifies as her dependent.However,she paid $650 in 2014 for medical expenses she incurred in 2013 when he was her dependent.Roxanne can include the $650 in figuring her medical expense deduction in 2014.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Self-Employed Business Income
Available Study Resources on Quizplus for this Chatper
75 Verified Questions
75 Flashcards
Source URL: https://quizplus.com/quiz/57904
Sample Questions
Q1) The standard mileage rate encompasses depreciation or lease payments,maintenance and repairs,gasoline,oil,insurance,and vehicle registration fees.
A)True
B)False
Q2) Oscar bought an $800,000 apartment building on July 28,2014.On August 15,2014,he purchased $300,000 of 5-year class assets.Oscar elects to take the maximum expense on every asset.What is the maximum cost recovery deduction Oscar can take in 2014?
Q3) The standard mileage rate includes parking fees,tolls,and property taxes on the vehicle.
A)True
B)False
Q4) Transportation costs are deductible when a taxpayer goes to a business meeting away from his or her regular workplace.
A)True
B)False
Q5) Under MACRS,the half-year convention is used for all real property.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Capital Gains and Other Sales of Property
Available Study Resources on Quizplus for this Chatper
123 Verified Questions
123 Flashcards
Source URL: https://quizplus.com/quiz/57903
Sample Questions
Q1) If the property's fair market value at the date of the gift is lower than the adjusted basis,then the property's basis for determining loss is its fair market value on that date.
A)True
B)False
Q2) The holding period for property acquired by inheritance begins on the date of the decedent's death.
A)True B)False
Q3) If the taxpayer's aggregate Section 1231 gains for the year exceed aggregate Section 1231 losses for the year,all such gains and losses are considered to be ordinary.
A)True
B)False
Q4) A taxpayer can deduct a loss on a security when the market price of the stock is less than the basis at the end of the year.
A)True B)False
Q5) Jim,the owner of a sole proprietorship,sold the following assets in 2014: To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Rental Property, Royalties, and Income From
Flow-Through Entities
Available Study Resources on Quizplus for this Chatper
110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/57902
Sample Questions
Q1) A personal/rental property (that is not a trade or business)may report its income and expenses on Schedule A.
A)True
B)False
Q2) The income from a partnership to its partner is considered self-employment income.
A)True
B)False
Q3) Which of the following is not considered a flow-through entity?
A) Limited liability company.
B) Sole proprietorship.
C) Partnership.
D) S corporation.
Q4) Explain the three categories that a rental activity may fall under if used for both personal and rental purposes.How are the categories determined?
Q5) Assume the same facts as #71,but Meredith rented her house (at fair value)to her brother and his family for 9 days (in addition to her personal use)and total days rented was 180 days.How is the cabin categorized now? Explain your answer.
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Tax Credits
Available Study Resources on Quizplus for this Chatper
134 Verified Questions
134 Flashcards
Source URL: https://quizplus.com/quiz/57901
Sample Questions
Q1) Guillermo and Felicia are married,file a joint return,and have one dependent child; Hannah,age 6.Guillermo has earned income of $38,000.Felicia was a full-time student (for 8 months)with no income.They paid a qualified day care center $4,800.What is the amount of their child and dependent care credit for the year?
A) $0.
B) $460.
C) $600.
D) $4,800.
Q2) Briefly explain how to calculate the child and dependent care credit and how the calculation for the credit is affected if the taxpayer's spouse does not work but is a full-time student instead.
Q3) Name the two credits that are available as education credits and briefly discuss the criteria to claim the credits.
Q4) The maximum allowable lifetime learning credit per year is $2,000 per student.
A)True B)False
Q5) What are the requirements that the taxpayer must meet to receive a tax credit for child and dependent care expenses? Briefly discuss.
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Payroll Taxes
Available Study Resources on Quizplus for this Chatper
125 Verified Questions
125 Flashcards
Source URL: https://quizplus.com/quiz/57900
Sample Questions
Q1) Generally,an employer must withhold 28% of certain taxable payments if the payee fails to furnish the employer with a correct taxpayer identification number.
A)True
B)False
Q2) Household employees are subject to FICA withholding if they are paid at least what amount during 2014?
A) $1,600.
B) $1,700.
C) $1,800.
D) $1,900.
Q3) In a large food or beverage establishment,on what form or schedule is any tip shortfall from a directly tipped employee recorded?
A) Form 4070.
B) Form 8027.
C) Form 8109.
D) Schedule
Q4) Nikki's salary is $209,950 in 2014.How much social security and Medicare taxes will be withheld from Nikki's salary for the year?
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: Retirement and Other Tax-Deferred Plans and Annuities
Available Study Resources on Quizplus for this Chatper
125 Verified Questions
125 Flashcards
Source URL: https://quizplus.com/quiz/57899
Sample Questions
Q1) Employers with 200 or fewer employees who do not have a qualified pension or profit-sharing plan can establish a SIMPLE retirement plan for their employees.
A)True
B)False
Q2) Distributions from a qualified pension plan may be fully taxable,nontaxable,or a combination of both.
A)True
B)False
Q3) Which of the following statements is incorrect?
A) Roth IRA distributions are never taxable.
B) Taxpayers can rollover plan assets from one plan to another tax-free if certain rules are followed.
C) If distributions from a Coverdell Education Savings Account are used for qualified education expenses,the distributions are tax-free.
D) For traditional IRA distributions,the date on which minimum payments must begin is April 1 of the calendar year following the year in which the taxpayer reaches age 70½.
Q4) What is an annuity contract? Who are the parties to an annuity contract?
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Special Property Transactions
Available Study Resources on Quizplus for this Chatper
73 Verified Questions
73 Flashcards
Source URL: https://quizplus.com/quiz/57898
Sample Questions
Q1) The property to be received in a like-kind exchange must be identified within:
A) 45 days after the transfer of the property relinquished in the exchange.
B) 90 days after the transfer of the property relinquished in the exchange.
C) 180 days after the transfer of the property relinquished in the exchange.
D) There is no time limit to identify the property to be received.
Q2) Depreciation recapture on an asset sold using the installment method is recognized ratably as payments are received.
A)True
B)False
Q3) On July 1,2014,DJ sold equipment used in her business and reported the gain using the installment method.Her adjusted basis in the equipment was $150,000.The equipment was subject to $30,000 of depreciation recapture.DJ sold the property for $250,000,with $100,000 due on the date of the sale and $150,000 (plus interest at the Federal rate)due on August 1,2015.What is the amount of gain recognized in 2014?
Q4) Exchange of one partnership interest for another partnership interest qualifies as a like-kind exchange.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: At-Riskpassive Activity Loss Rules and the
Individual Alternative Minimum Tax
Available Study Resources on Quizplus for this Chatper
72 Verified Questions
72 Flashcards
Source URL: https://quizplus.com/quiz/57897
Sample Questions
Q1) In 2012,Mary invested $200,000 in a business that is not a passive activity.During 2013,her share of the business loss is $140,000.In 2014,her share of the business loss is $100,000.How much can Mary deduct in 2013 and 2014?
Q2) Heather purchased furniture and fixtures (7-year property)for her retail shop for $50,000.What is the AMT depreciation adjustment required in 2014 if the property was purchased in May 2014,assuming no bonus depreciation was taken?
A) $0.
B) $1,790.
C) $5,355.
D) $7,145.
Q3) Which of the following is a passive activity?
A) A limited partnership interest.
B) Rental real estate activities where the owner is a real estate professional and works 800 hours per year.
C) A trade or business in which the taxpayer materially participates.
D) All of these.
Q4) Identify factors that increase or decrease the at-risk amount.
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Partnership Taxation
Available Study Resources on Quizplus for this Chatper
75 Verified Questions
75 Flashcards
Source URL: https://quizplus.com/quiz/57896
Sample Questions
Q1) A partner's basis in his or her partnership interest (outside basis)is the sum of the money contributed plus the adjusted basis of property contributed.
A)True
B)False
Q2) Which of the following items increases a partner's basis in his or her partnership interest?
A) The basis of property contributed.
B) Ordinary income that flows through from the partnership.
C) Tax-exempt income that flows through from the partnership.
D) All of these.
Q3) If Jake contributes land to a partnership with a basis of $12,000 and a FMV of $18,000,the partnership will have a basis in the asset of $12,000.
A)True
B)False
Q4) When a partner is released of a partnership liability,the partner is treated as receiving a money distribution,which reduces his or her partnership basis.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: Corporate Taxation
Available Study Resources on Quizplus for this Chatper
127 Verified Questions
127 Flashcards
Source URL: https://quizplus.com/quiz/57895
Sample Questions
Q1) Purple Company makes and sells computer printers.It has taxable income of $1,300,000 before taking into account charitable contributions.The company contributed a parcel of unused land to an art museum to be used to construct a branch museum.The land had a FMV of $50,000 and a basis of $30,000.The company also donated 1,000 of its computer printers to the local community college for use in student computer labs.The printers have a FMV of $200 each and a basis of $120 each.Determine the taxable income of Purple Company and its charitable contribution carryforward,if any.
Q2) A corporation may elect to become a Subchapter S corporation only at the time it is initially formed.
A)True
B)False
Q3) Basira transfers land with a FMV of $900,000 to a newly formed corporation in exchange for all of the stock.The land has a basis of $500,000 and debt of $300,000.Basira's taxable gain from this transaction is:
A) $0.
B) $300,000.
C) $400,000.
D) $500,000.
To view all questions and flashcards with answers, click on the resource link above.
Page 17