Course Introduction
Tax Policy Exam Preparation Guide
Tax Policy explores the principles, structures, and effects of tax systems at local, national, and global levels. The course examines how taxes influence economic behavior, raise revenue, and shape the distribution of resources in society. Key topics include the objectives of taxation, the incidence and efficiency of different tax instruments, tax reform, and the interplay between taxation, government spending, and economic growth. Students also analyze contemporary tax policy debates and assess the impacts of various tax policies on businesses, individuals, and governments across socio-economic contexts.
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) A paid tax preparer who violates the provisions of Circular 230 can be subject to civil,but not criminal,penalties.
A)True
B)False
Answer: False
Q2) Sallie earned $85,000 and paid $5,950 of income tax; Theodore earned $33,000 and paid $2,310 of income tax.The tax rate structure they are subject to is:
A) Progressive.
B) Proportional.
C) Regressive.
D) Recessive.
Answer: B
Q3) Which of the following would disqualify a taxpayer from filing a Form 1040EZ?
A) Have total taxable income under $100,000.
B) Be under age 65 and not blind.
C) Have no dependents.
D) Have interest income more than $2,000.
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 3
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) A taxpayer must be married to claim Head of Household status.
A)True
B)False
Answer: False
Q2) What qualifications are necessary to file as qualifying widow(er)?
Answer: The qualifications necessary to file as qualifying widow(er)are: 1.Taxpayer was eligible to file a joint return in the year the spouse died. 2.Taxpayer did not remarry before the end of the tax year in question. 3.Taxpayer paid more than half the cost of keeping up a household. 4.The household was the principal place of abode for the entire year (except for temporary absences)of both the taxpayer and a child,stepchild,or adopted child who can be claimed as a dependent by the taxpayer.
Q3) The basic standard deduction in 2014 for a taxpayer,69 and not blind,filing head of household is:
A) $6,200.
B) $9,100.
C) $10,650.
D) $10,300.
Answer: C
To view all questions and flashcards with answers, click on the resource link above. Page 4
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) Taxpayers are not required to "impute interest" on a deferred payment contract for which no interest,or a low rate of interest,is stated.
A)True
B)False
Answer: False
Q2) Felix,a single taxpayer,claimed $180 of state tax as an itemized deduction on his 2013 tax return.The total itemized deductions on his tax return were $6,215.In 2014,he received a $25 refund from the state.What is the amount Felix has to report on his 2014 tax return?
A) $0.
B) $115.
C) $180.
D) $25.
Answer: D
Q3) Banks and credit unions report interest income to taxpayers on Form 1099-INT.
A)True
B)False
Answer: True
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) David,who is single,received his degree in 2013,and took a job earning $62,500 per year.In 2013,he was required to begin making payments on his qualified education loans.In 2014 he paid $1,350 in interest on those loans.How much can he claim as an educational loan interest deduction for the year?
Q2) The cost of self-employed health insurance premiums are deductible above-the line at a rate of 80% of the cost.
A)True
B)False
Q3) For self-employed taxpayers,¾ of the amount of self-employment taxes are deductible as an above-the-line deduction.
A)True
B)False
Q4) 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.
Q5) What is a Health Savings Account (HSA)?
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) In 2014,the Chens' pleasure boat was severely damaged by a hurricane in an area that was declared a federal disaster area.They had AGI of $110,000 in 2014.The following information relates to the craft: The Chens had insurance and received an $80,000 insurance settlement.
What is the allowable casualty loss deduction for the Chens in 2014?
A)$50,000.
B)$15,000.
C)$ 3,900.
D)$ 3,000.
Q2) What are four major categories of deductible taxes for individual returns?
Q3) Which of the following expenses is deductible,but subject to the 2% limitation on Form 1040,Schedule A,Job Expenses and Most Other Miscellaneous Itemized Deductions?
A)A blue suit for an accountant.
B)Appraisal fees on the sale of a personal residence.
C)Uniforms for a UPS delivery person.
D)The cost of hauling tools to work in the trunk of a car.
Q4) The cost of a chiropractor's services does not qualify as a medical deduction.
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) On May 26,2010,Jamal purchased machinery for $30,000 to be used in his business.He did not elect to expense the equipment under §179 or the bonus.On October 10,2014,he sells the machinery to a scrap metal dealer.What is his cost recovery deduction for 2014 rounded to the nearest dollar?
A) $0.
B) $1,340.
C) $2,679.
D) $4,287.
Q2) §179 expense is available for all of the following business assets except:
A) Bulldozer.
B) Phone system.
C) Apartment complex.
D) Office furniture.
Q3) When business property is lost in a fire,storm,shipwreck,theft,or other casualty,the taxpayer normally receives a capital loss deduction.
A)True
B)False
Q4) Bart has the following income and expenses for his Schedule C:
Q5) Describe each of the depreciation conventions and when each is applicable.
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) 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
Q2) Sylvio purchased an apartment building as an investment in January 2008 for $383,500 and sold it for $475,000 in 2014.He reported $68,436 of allowed accumulated straight-line depreciation.If Sylvio is in the highest tax bracket for ordinary income,how much of his gain qualifies for preferential tax treatment?
A) $0.
B) $68,436.
C) $91,500.
D) $159,936.
Q3) Dancing Feet Company,a sole proprietorship,acquired a building for use in the business on April 15,2012,for $475,000.Straight-line depreciation allowed was $25,386.Dancing Feet Company sold the building for $380,000 on May 1,2014.
a.What is the adjusted basis of the property at the time of the sale?
b.What is the amount of the gain (loss)upon the sale of the building?
c.What is the nature of the gain (loss)?
To view all questions and flashcards with answers, click on the resource link above.
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) On June 1<sup>st</sup> of the current year,Kayla and Ralph purchased a rental beach house for $700,000.Of that amount,$400,000 was for the land value.How much depreciation deduction can they take in the current year? (You may need to refer to the depreciation tables.)
A) $0.
B) $5,910.
C) $7,880.
D) $13,790.
Q2) Meredith has a vacation rental house in the Sierra Mountains.During the year,she and her immediate family used the house for 12 days for a personal vacation.Meredith spent two more weekends (4 days in total)repairing the deck.The house was rented for 120 days.How should the cabin be categorized this year for tax purposes? Explain your answer.
Q3) Royalties can be earned from allowing others the right to use:
A) Building.
B) Equipment.
C) Furniture.
D) Copyrighted material.
Q4) What are the different types of income that may be reported on Schedule E?
Q5) Explain what is considered personal use of a rental property.
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) Kyle and Alyssa paid $1,000 and $2,000 in qualifying expenses for their two daughters Jane and Jill,respectively,to attend the University of California.Jane is a sophomore and Jill is a freshman.Kyle and Alyssa's AGI is $132,000 and they file a joint return.What is their allowable American opportunity tax credit after the credit phase-out based on AGI is taken into account?
A) $0.
B) $2,000.
C) $3,000.
D) $3,700.
Q2) Harrison is single and his son Jack is 12 years old.If his AGI is $195,000,what amount of child tax credit can Harrison claim?
A) $0.
B) $1,000.
C) $2,000.
D) $2,500.
Q3) There is no maximum amount for the adoption credit.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
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) Ladaris has two jobs.She earned $118,000 from her first job and $10,000 from her second job.How much total FICA taxes will Ladaris have withheld from her wages from working two jobs?
A) $8,965.00.
B) $9,110.00.
C) $9,730.00.
D) $9,792.00.
Q2) Angie earned $120,000 during 2014.She is single,claims two withholding allowances,and is paid monthly.How much federal withholding tax will Angie's employer withhold for 2014?
A) $23,932.32.
B) $23,933.75.
C) $23,961.75.
D) $24,101.64.
Q3) The amount withheld from supplemental payments depends on whether the employer accounts for the payment separate from regular wages.
A)True
B)False
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) All of the following are employer-sponsored plans except:
A) Coverdell Education Savings Account.
B) Qualified profit-sharing plan.
C) Keogh plan.
D) 403(b).
Q2) Xavier is a self-employed plumber.His earnings from self-employment,before the Keogh deduction but after deducting half of the self-employment tax,are $80,000.What is his deductible Keogh contribution for 2014?
A) $16,000.
B) $20,000.
C) $52,000.
D) $64,000.
Q3) Defined-contribution plans establish the amount of retirement benefits an employee will receive in retirement.
A)True
B)False
Q4) Pension plan distributions are reported to taxpayers on a Form 1099-P.
A)True
B)False
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 holding period of property received in a like-kind exchange:
A) Includes the holding period of the old asset exchanged.
B) Begins on the date of the exchange.
C) Begins on the date the exchange property is identified.
D) Begins up to 180 days prior to the exchange.
Q2) Pierre sold a parcel of land for $50,000.He received $10,000 this year and signs a contract to receive four additional payments of $10,000 each plus interest.If Pierre had a basis in the land of $10,000 and incurred $2,500 in selling expenses,what is his gross profit percentage?
A) 10%.
B) 25%.
C) 75%.
D) 100%.
Q3) To postpone any gain on an involuntary conversion,the taxpayer must purchase qualifying replacement property that is "similar or related in service or use" to the property involuntarily converted.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
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) The Tara Partnership (not involved in real estate)generated income of $75,000 during the year.Since the partnership is involved in an activity that is subject to the at-risk rules,all of Tara's partners must file Form 6198 with their individual income tax returns.
A)True
B)False
Q2) Tax preference items for AMT:
A) Can be positive or negative.
B) Can only result in a positive addition to AMTI.
C) Do not affect the AMT calculation.
D) None of these.
Q3) 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?
Q4) "Active participation" is a much more difficult standard to meet than "material participation."
A)True
B)False
Q5) Identify factors that increase or decrease the at-risk amount.
Page 15
To view all questions and flashcards with answers, click on the resource link above.
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) If Casey's partnership basis is only $100,000 and Cherie's basis is $200,000,there is no way both Casey and Cherie can be equal partners at 50% each in the partnership.
A)True
B)False
Q2) Partnership income or loss and separately stated items are reported to the individual partners via Schedule K-1.
A)True
B)False
Q3) If Josh's partnership basis was $5,000 and he received a distribution of land that had a basis of $10,000,Josh would be required to recognize a $5,000 gain.
A)True
B)False
Q4) Ordinary income from a partnership is not considered self-employment income. A)True
B)False
Q5) Guaranteed payments are always determined with regard to partnership income.
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) Benedict 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.The basis of the land,in the hands of the corporation is:
A) $300,000.
B) $400,000.
C) $500,000.
D) $900,000.
Q2) Zeus owns 100% of Grecian Image Corporation and his basis in the stock is $105,000.He receives cash of $20,000 and property with FMV of $100,000 and basis of $140,000 in complete liquidation of his ownership interest.What amount of gain or loss should Zeus recognize as a result of this transaction?
A) $5,000 loss.
B) $15,000 gain.
C) $55,000 gain.
D) Some other number.
Q3) A Subchapter S corporation must be a domestic corporation.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.