Tax Accounting
Chapter Exam Questions
Course Introduction
Tax Accounting focuses on the principles, regulations, and procedures involved in preparing and reporting income taxes for individuals, businesses, and other entities. The course covers tax laws, compliance requirements, tax planning strategies, and the analysis of taxable transactions. Students will learn to interpret the Internal Revenue Code, apply tax concepts to real-world scenarios, and prepare tax returns using current software solutions. Emphasis is placed on understanding deductions, credits, and the ethical responsibilities of tax professionals, as well as considering the impact of tax decisions on financial planning and organizational strategy.
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) The Federal excise tax on cigarettes is an example of a proportional tax. A)True
B)False Answer: True
Q2) If more IRS audits are producing a greater number of no change results, this indicates increased compliance on the part of taxpayers.
A)True
B)False Answer: False
Q3) 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
Q4) What might cause an individual to owe income taxes in more than one state?
Answer: Working in more than one state, or owning income-generating property in more than one state.
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) Subchapter D refers to the "Corporate Distributions and Adjustments" section of the Internal Revenue Code.
A)True
B)False
Answer: False
Q2) What is a Technical Advice Memorandum?
Answer: The National Office of the IRS releases Technical Advice Memoranda (TAMs) weekly. TAMs resemble letter rulings in that they give the IRS's determination of an issue. However, they differ in several respects. Letter rulings deal with proposed transactions and are issued to taxpayers at their request. In contrast, TAMs deal with completed transactions. Furthermore, TAMs arise from questions raised by IRS personnel during audits and are issued by the National Office of the IRS to its field personnel. TAMs are often requested for questions relating to exempt organizations and employee plans. TAMs are not officially published and may not be cited or used as precedent.
Q3) In general, Regulations are issued immediately after a statute is enacted.
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) Age of a qualifying child
Answer: d
Q2) Benjamin, age 16, is claimed as a dependent by his parents. During 2018, he earned $850 at a car wash. Benjamin's standard deduction is $1,400 ($1,050 + $350).
A)True
B)False
Answer: False
Q3) 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
Q4) Multiple support agreement
Answer: e
Q5) Resident of Canada or Mexico
Answer: b
Q6) Relationship test (for dependency exemption purposes)
Answer: f
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) Paula transfers stock to her former spouse, Fred. The transfer is pursuant to a divorce agreement. Paula's cost of the stock was $75,000 and its fair market value on the date of the transfer is $95,000. Fred later sells the stock for $100,000. Fred's recognized gain from the sale of the stock is $5,000.
A)True
B)False
Q2) Samantha and her son, Brent, are cash basis taxpayers. Samantha gave Brent a corporate bond with a face amount and fair market value of $10,000. On the date of the gift, March 31, 2018, the accrued interest on the bond was $100. On December 31, 2018, Brent collected $400 interest on the bond. Brent must include in gross income the $300 interest earned after the date of the gift.
A)True
B)False
Q3) In the case of a zero interest below-market loan by a corporation to a shareholder-employee, what difference does it make to the corporation and the shareholder whether the loan is characterized as a corporation's loan to its shareholder or a corporation's loan to its employee?
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) The taxpayer's marginal federal and state tax rate is 25%. Which would the taxpayer prefer?
A) $1.00 taxable income rather than $1.25 tax-exempt income.
B) $1.00 taxable income rather than $.75 tax-exempt income.
C) $1.25 taxable income rather than $1.00 tax-exempt income.
D) $1.40 taxable income rather than $1.00 tax-exempt income.
E) None of these.
Q2) Sarah's employer pays the hospitalization insurance premiums for a policy that covers all employees and retired former employees. After Sarah retires, the hospital insurance premiums paid for her by her employer can be excluded from her gross income.
A)True
B)False
Q3) Cash received by an employee from an employer:
A) Is not included in gross income if it was not earned.
B) Is not taxable unless the payor is legally obligated to make the payment.
C) Must always be included in gross income.
D) May be included in gross income although the payor is not legally obligated to make the payment.
E) None of these.
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) Beulah's personal residence has an adjusted basis of $450,000 and a fair market value of $390,000. Beulah converts the property to rental use this year. The vacation home rules that limit the amount of the deduction to the rental income will apply and the adjusted basis for depreciation is $390,000.
A)True
B)False
Q2) Jacques, who is not a U.S. citizen, makes a contribution to the campaign of a candidate for governor. Cassie, a U.S. citizen, also makes a contribution to the same campaign fund. If contributions by noncitizens are illegal under state law, the contribution by Cassie is deductible, while that by Jacques is not.
A)True
B)False
Q3) Payments by a cash basis taxpayer of capital expenditures:
A) Must be expensed at the time of payment.
B) Must be expensed by the end of the first year after the asset is acquired.
C) Must be deducted over the actual or statutory life of the asset.
D) Can be deducted in the year the taxpayer chooses.
E) None of the above.
Q4) What losses are deductible by an individual taxpayer?
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) The purpose of the "excess business loss" rules are to limit the amount of non-business income (e.g., salaries, interest, dividends, etc.) that can be "sheltered" from tax as a result of business losses.
A)True
B)False
Q2) The amount of loss for partial destruction of business property is the decline in fair market value of the business property.
A)True
B)False
Q3) 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
Q4) A taxpayer can carry back any NOL incurred 2 years and then forward up to 20 years.
A)True
B)False
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) Cora purchased a hotel building on May 17, 2018, for $3,000,000. Determine the cost recovery deduction for 2019.
A) $48,150
B) $59,520
C) $69,000
D) $76,920
E) None of the above
Q2) Orange Corporation begins business on April 2, 2018. The corporation reports startup expenditures of $64,000 all incurred last year. Determine the total amount that Orange can elect to deduct in 2018.
A) $0
B) $3,200
C) $4,267
D) $7,950
E) None of the above
Q3) Discuss the criteria used to determine whether a building is residential or nonresidential realty. Also explain the tax consequences resulting from this determination if the property is placed in service in 2018.
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) A taxpayer who uses the automatic mileage method to compute auto expenses can also deduct the business portion of tolls and parking.
A)True
B)False
Q2) Travel status requires that the taxpayer be away from home overnight.
a. What does "away from home overnight" mean?
b. What tax advantages result from being in travel status?
Q3) A deduction for parking and other traffic violations incurred during business use of the automobile is allowed under the actual cost method but not the automatic mileage method.
A)True
B)False
Q4) The IRS will issue advanced rulings as to whether a worker's status is that of an employee or an independent contractor.
A)True
B)False
Q5) Lynn determines when the services are to be performed.
Q6) Sue uses her own helpers.
11
Q7) Sue does not file a Schedule SE with her Form 1040.
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 the taxpayer's principal residence and two other residences of the taxpayer or spouse.
A)True
B)False
Q2) Diane contributed a parcel of land to the United Way. In addition, she contributed bibles and song books from her proprietorship's book store inventory to First Church, a qualified charitable organization. Should Diane's charitable contribution deduction for these contributions be determined by the basis or fair market value of the contributed items?
Q3) Sergio was required by the city to pay $2,000 for the cost of new curbing installed by the city in front of his personal residence. The new curbing was installed throughout Sergio's neighborhood as part of a street upgrade project. Sergio may not deduct $2,000 as a tax, but he may add the $2,000 to the basis of his property.
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) During the current year, Ryan performs personal services as follows: 700 hours in his management consulting practice, 650 hours in a real estate development business, and 550 hours in an apartment leasing operation. He expects that losses will be realized from the two real estate ventures while his consulting practice will show a profit. Ryan files a joint return with his spouse whose salary is $125,000. Discuss the character and treatment of the income and losses generated by these activities.
Q2) Dick participates in an activity for 90 hours during the year. He has no employees and there are no other participants. Dick is a material participant.
A)True
B)False
Q3) A qualified real estate professional is allowed to treat income or loss from any real estate venture as active except for income or loss from a rental activity. A)True B)False
Q4) Significant participation activity.
Q5) What special passive activity loss treatment is available to real estate activities?
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) The earned income credit, a form of a negative income tax, is a refundable credit.
A)True
B)False
Q2) Some (or all) of the tax credit for rehabilitation expenditures will have to be recaptured if the rehabilitated property is disposed of prematurely or if it ceases to be qualifying property.
A)True
B)False
Q3) The tax credit for rehabilitation expenditures for certified historic structures differs from that for qualifying structures that are not certified historic structures.
A)True
B)False
Q4) Qualifying tuition expenses paid from the proceeds of a tax-exempt scholarship do not give rise to an education tax credit.
A)True
B)False
Q5) Describe the withholding requirements applicable to employers.
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) Kelly inherits land which had a basis to the decedent of $95,000 and a fair market value of $50,000 on August 4, 2018, the date of the decedent's death. The executor distributes the land to Kelly on November 12, 2018, at which time the fair market value is $49,000. The fair market value on February 4, 2019, is $45,000. In filing the estate tax return, the executor elects the alternate valuation date. Kelly sells the land on June 10, 2019, for $48,000. What is her recognized gain or loss?
A) ($1,000)
B) ($2,000)
C) ($47,000)
D) $1,000
E) None of the above
Q2) Wyatt sells his principal residence in December 2018 and qualifies for the § 121 exclusion. He sells another principal residence in November 2019. Under no circumstance can Wyatt qualify for the § 121 exclusion on the sale of the second residence.
A)True
B)False
Q3) What requirements must be satisfied to receive nontaxable exchange treatment under § 1031?
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) Lana purchased for $1,410 a $2,000 bond when it was issued two years ago. Lana amortized $200 of the original issue discount and then sold the bond for $1,800. Which of the following statements is correct?
A) Lana has $10 of long-term capital loss.
B) Lana has $190 of long-term capital gain.
C) Lana has no capital gain or loss.
D) Lana has $190 of long-term capital loss.
E) None of the above.
Q3) Section 1245 depreciation recapture potential does not carryover from a deceased taxpayer to the beneficiary taxpayer.
A)True
B)False
Q4) May an individual that has purchased a patent be a holder of that patent?
Page 16
To view all questions and flashcards with answers, click on the resource link above.
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) Double taxation of corporate income results because dividend distributions are included in a shareholder's gross income but are not deductible by the corporation.
A)True B)False
Q2) Donald owns a 45% interest in a partnership that earned $130,000 in the current year. He also owns 45% of the stock in a C corporation that earned $130,000 during the year. Donald received $20,000 in distributions from each of the two entities during the year. With respect to this information, Donald must report $78,500 of income on his individual income tax return for the year.
A)True B)False
Q3) Once a taxpayer reaches certain taxable income thresholds, § 199A limits the qualified business income (QBI) deduction. These thresholds ($315,000 for married taxpayers filing jointly and $157,500 for all other taxpayers) are indexed for inflation after 2018.
A)True B)False
Q4) What are some of the issues remaining unresolved with 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) When a taxpayer with average annual gross receipts in excess of $25 million finances the construction of its building by borrowing, the interest is added to the cost of the building.
A)True
B)False
Q2) Hal sold land held as an investment with a fair market value of $100,000 for $36,000 cash and a note for $64,000 that was due in two years. The note bore interest of 7% when the applicable Federal rate was 4%. Hal's cost of the land was $40,000. Because of the buyer's good credit record and the high interest rate on the note, Hal thought the fair market value of the note was at least $74,000.
A) Hal can elect to treat the $36,000 as a recovery of capital.
B) Hal must recognize $60,000 gain in the year of sale.
C) Hal must recognize $36,000 gain in the year of sale.
D) Unless Hal elects not to use the installment method, Hal must recognize $21,600 gain in the year of sale.
E) None of the above.
Q3) What incentives do the tax accounting rules provide for taxpayers to voluntarily change from an incorrect method of accounting that has reduced the company's tax liability in prior years?
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) In general, all corporations that maintain inventory for sale to customers are required to use the accrual method of accounting for all income and expense items.
A)True
B)False
Q2) Under the "check-the-box" Regulations, a two-owner LLC that fails to elect to be to treated as a corporation will be taxed as a sole proprietorship.
A)True
B)False
Q3) On December 31, 2018, Flamingo, Inc., a calendar year, accrual method C corporation, accrues a bonus of $50,000 to its president (a cash basis taxpayer), who owns 75% of the corporation's outstanding stock. The $50,000 bonus is paid to the president on February 4, 2019. For Flamingo's 2018 Form 1120, the $50,000 bonus will be a subtraction item on Schedule M-1.
A)True
B)False
Q4) Contrast the tax treatment of capital gains and losses of C corporations with that of individual taxpayers.
To view all questions and flashcards with answers, click on the resource link above.
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) A corporation's holding period for property received under § 351 includes the holding period of the transferor shareholder.
A)True
B)False
Q2) Eve transfers property (basis of $120,000 and fair market value of $400,000) to Green Corporation for 80% of its stock (worth $350,000) and a long-term note (worth $50,000), executed by Green Corporation and made payable to Eve. As a result of the transfer:
A) Eve recognizes no gain.
B) Eve recognizes a gain of $230,000.
C) Eve recognizes a gain of $280,000.
D) Eve recognizes a gain of $50,000.
E) None of the above.
Q3) 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?
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) Explain the stock attribution rules that apply in the case of stock redemptions.
Q2) At the beginning of the current year, Paul and John each own 50% of Apple Corporation. In July, Paul sold his stock to Sarah for $110,000. At the beginning of the year, Apple Corporation had accumulated E & P of $200,000 and its current E & P is $250,000 (prior to any distributions). Apple distributed $260,000 on March 1 ($130,000 to Paul and $130,000 to John) and distributed another $260,000 on October 1 ($130,000 to Sarah and $130,000 to John). What are the tax implications of the $130,000 distribution to Sarah?
Q3) What are the requirements that must be satisfied for a distribution to qualify under § 302(b)(2) as a disproportionate redemption?
Q4) Intangible drilling costs deducted currently.
Q5) On January 1, Tulip Corporation (a calendar year taxpayer) has accumulated E & P of $300,000. Its current E & P for the year is $90,000 (before considering dividend distributions). During the year, Tulip distributes $600,000 ($300,000 each) to its equal shareholders, Anne and Tom. Anne has a basis in her stock of $65,000, while Tom's basis is $120,000. What is the effect of the distribution by Tulip Corporation on Anne and Tom?
Q6) Premiums paid on key employee life insurance policy (assume no increase in cash surrender value of policy) in 2018.
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) Section 332 can apply to a parent-subsidiary liquidation even if the subsidiary corporation is insolvent on the date of the liquidation.
A)True
B)False
Q2) Target shareholders recognize gain or loss when they receive assets (boot) as well as stock in the acquiring corporation in a transaction meeting the § 368 requirements.
A)True
B)False
Q3) Ruby Corporation has announced plans to liquidate. Bronze Corporation owns 85% of Ruby's stock. If Bronze wants to avoid the nontaxable treatment associated with a § 332 liquidation (e.g., nonrecognition of loss), it could reduce its stock ownership in Ruby to below 80%.
A)True
B)False
Q4) Discuss the role of letter rulings in corporate reorganizations.
Q5) What are the tax consequences of a § 332 liquidation to the parent corporation, subsidiary corporation, and minority shareholder?
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) The MOG Partnership reports ordinary income of $60,000, long-term capital gain of $12,000, and tax-exempt income of $12,000. The partnership agreement provides that Molly will receive all long-term capital gains and George will receive all tax-exempt interest income. Their allocation of ordinary income will be reduced accordingly, and Olivia will be allocated a proportionately greater share of ordinary income. (In other words, each partner will receive allocations totaling 1/3 of the total $84,000 of partnership income.) This allocation was agreed upon because Molly and George are in a high marginal tax bracket and Olivia is in a low marginal tax bracket.
a. Describe the elements that must be included in a partnership agreement in order for an allocation to have "economic effect."
b. Discuss whether or not the MOG allocation would be permitted and provide your reasoning.
Q2) Generally, no gain is recognized on a proportionate liquidating or current (nonliquidating) distribution of non-cash property even if the fair market value of property distributed exceeds the partner's basis in the partnership interest.
A)True
B)False
Q3) Partner's capital account
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) Donna and Mark are married and file a joint return reporting taxable income of $350,000. Donna owns a qualified S corporation that is not a specified service business. During the year, Donna incurs qualified business income of $75,000. Donna's share of wages paid by the business is $20,000. Assuming there is no qualified property factor, calculate her 20% QBI deduction.
A) $0.
B) $9,750.
C) $15,000.
D) $20,000.
Q2) An estate may be a shareholder of an S corporation.
A)True
B)False
Q3) Fred is the sole shareholder of an S corporation in Fort Deposit, Alabama. At a time when his stock basis is $20,000, the corporation distributes appreciated property worth $100,000 (basis of $20,000). Fred's taxable gain is:
A) $0.
B) $10,000.
C) $80,000.
D) $100,000.
To view all questions and flashcards with answers, click on the resource link above.
Page 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) Which of the following are qualified corporate sponsorship payments?
A) The amount of the payment by the corporation to the exempt organization is contingent on the attendance at one or more events.
B) The payment by the corporation is determined by the number of likes on the exempt organization's Facebook page.
C) The payment by the corporation to the exempt organization results in the corporate logo appearing in the exempt organization's monthly newsletter.
D) Only b. and c.
E) a., b., and c.
Q2) Both of these organizations are exempt from Federal income tax. A donor can claim a charitable contribution for a gift to:
A) The Dubuque Art Museum.
B) The IBM Group Legal Service Plan.
C) Both a. and b.
D) Neither a. nor b.
Q3) Not an exempt organization
Q4) Form 990
Q5) Tax on jeopardizing investments
To view all questions and flashcards with answers, click on the resource link above. Page 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) Double weighting the sales factor effectively decreases the corporate income tax burden on taxpayers based in the state, such as entities with in-state headquarters.
A)True
B)False
Q2) Some of the states use, in determining whether an out-of-state entity has income tax nexus:
A) A factor-presence test.
B) An economic presence test.
C) Both a. and b are used by certain states.
D) Neither a. nor b is used by the states.
Q3) Federal depreciation deduction in excess of state amount.
Q4) The typical local property tax falls on both an investor's principal residence and her stock portfolio.
A)True
B)False
Q5) A garment purchased by a self-employed actress.
Q6) A garment purchased for resale.
Q7) Purchasing ads that show up on search-result screens for internet browsers.
To view all questions and flashcards with answers, click on the resource link above. Page 26
Q8) An ad valorem property tax is based on the asset's current ________________ .
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) Which of the following foreign taxes paid by a U.S. corporation may be eligible for the foreign tax credit?
A) Real property taxes.
B) Value added taxes.
C) Sales taxes.
D) Dividend withholding taxes.
Q2) Interest paid to an unrelated party by a domestic corporation that historically earns more than 50% of its gross income each year from the conduct of an active trade or business outside the United States is foreign-source income.
A)True
B)False
Q3) Portfolio income treated as Subpart F income.
Q4) Nico lives in California. She was born in Peru but holds a green card. Nico is a nonresident alien (NRA).
A)True B)False
Q5) Unused foreign tax credits are carried back two years and then forward 20 years.
A)True
B)False
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) Quon filed an amended return, claiming a $100,000 refund. The IRS disallowed the refund, and it can assess a penalty if there was no reasonable basis of support for the refund claim, in the amount of ________________% of the disallowed amount.
Q2) Latrelle prepares the tax return for Whitehall Corporation. Latrelle includes a $5,000 deduction on the return. This type of deduction previously has been disallowed by the Tax Court, although there is a 15% chance that the holding will be reversed on an appeal by Whitehall. The return does not make any special disclosure that the deduction is being claimed. Whitehall paid Latrelle a fee of $8,000 for preparing the Form 1120. Latrelle will be assessed a preparer penalty of $4,000 for taking an unreasonable position on the Whitehall return.
A)True
B)False
Q3) The IRS processes about ________________ million individual tax returns every year, about________________percent of which are filed electronically.
Q4) The IRS is one of the largest Federal agencies, employing almost ________________ people throughout the year.
Q5) Fraudulent failure to file a tax return.
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) Transfers to political organizations are exempt from the application of the Federal gift tax.
A)True
B)False
Q2) Which, if any, of the following is a characteristic of the Federal estate tax?
A) A foreign tax credit is available.
B) A credit for tax on prior transfers may be available.
C) A charitable deduction is available.
D) All of the above.
Q3) Stacey inherits unimproved land (fair market value of $6 million) from her father on June 1, 2017. Stacey disclaims her interest in the property as follows: one-third on December 1, 2017? one-third on January 3, 2018? and the remaining one-third on May 31, 2018. In all cases, the disclaimers pass the interest to her son (the next heir under state law). The Federal gift tax applies to Stacey for:
A) All of the disclaimers.
B) The disclaimer made in 2017.
C) The May 31, 2018 disclaimer.
D) All of the disclaimers made in 2018.
E) None of the disclaimers.
To view all questions and flashcards with answers, click on the resource link above.
Page 29
Chapter 28: Income Taxation of Trusts and Estates
Available Study Resources on Quizplus for this Chatper
161 Verified Questions
161 Flashcards
Source URL: https://quizplus.com/quiz/7735
Sample Questions
Q1) The Doyle Trust reports distributable net income for the year of $100,000 and no income from tax-exempt sources. Under the terms of the trust instrument, the trustee must distribute $30,000 to Roger and $30,000 to Sally. After payment of these amounts, the trustee is empowered to make additional distributions at its discretion. Exercising this authority, the trustee distributes an additional $25,000 to Roger and $25,000 to Sally. How much income from the trust must Sally recognize?
A) $25,000.
B) $30,000.
C) $50,000.
D) $55,000.
Q2) The trust usually makes a distribution to the income beneficiaries in the amount of its fiduciary____________________ income.
Q3) Every simple trust is allowed a ________________ $ personal exemption.
Q4) The Stratford Estate incurs a $25,000 legal fee in disposing of the real property of the decedent. The executor can decide to claim a $5,000 deduction against the Federal estate tax, and a $20,000 deduction on the estate's income tax return.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 30