Taxation for Accountants Question Bank
Course Introduction
Taxation for Accountants provides a comprehensive overview of the principles and practices of taxation as they apply to individuals, businesses, and corporations. The course covers the foundational concepts of tax laws, tax planning, and tax compliance, with a strong emphasis on their relevance to the accounting profession. Students will explore various types of taxes, including income, sales, and payroll taxes, analyze tax regulations, and learn to prepare tax returns and supporting documentation. Through case studies and practical examples, participants will develop the skills needed to identify tax issues, apply regulatory guidelines, and advise clients on tax planning strategies while ensuring adherence to ethical and legal standards.
Recommended Textbook
Concepts in Federal Taxation 2017 24th Edition by Kevin E. Murphy
Available Study Resources on Quizplus
16 Chapters
2073 Verified Questions
2073 Flashcards
Source URL: https://quizplus.com/study-set/3583 Page 2
Chapter 1: Federal Income Taxation-An Overview
Available Study Resources on Quizplus for this Chatper
151 Verified Questions
151 Flashcards
Source URL: https://quizplus.com/quiz/71134
Sample Questions
Q1) Ed travels from one construction site to another pursuing his work as an insulator.Because of family problems and being on the road so much,Ed overlooked filing his 2010 tax return.Ed hasn't filed any returns since 2010 because he is afraid the IRS will find the missed returns and put him in jail and he won't be able to support his family.Ed carefully makes sure that his employers withhold more income tax than is necessary.Ed knows for certain that if he filed the late returns he would get a tax refund for each of the years.Has Ed evaded the income tax? Explain.
Answer: No.Evasion is the willful concealment of certain facts in order to receive a tax benefit.Ed has not evaded; he has just failed to file a return.He is not receiving a tax benefit.In fact,he probably has over-paid his tax liability.
Q2) Which of the following payments meets the IRS definition of a tax?
A)Sewer fee charged added to a city trash collection bill.
B)A special assessment paid to the county to pave a street.
C)A levy on the value of a deceased taxpayer's estate.
D)Payment of $300 to register an automobile. The $300 consists of a $50 registration fee and $250 based on the weight of the auto.
Answer: C
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Income Tax Concepts
Available Study Resources on Quizplus for this Chatper
153 Verified Questions
153 Flashcards
Source URL: https://quizplus.com/quiz/71135
Sample Questions
Q1) Which of the following concepts/doctrines state(s)that items may be omitted from the tax base whenever the cost of implementing a concept exceeds the benefit of using it?
A)Ability-to-Pay.
B)Administrative Convenience.
C)Arm's-length Transaction.
D)Substance-Over-Form.
E)Tax Benefit Rule.
Answer: B
Q2) An individual can legally assign income to another individual,and the assignment relieves the owner of the income from paying tax on the income.
A)True
B)False
Answer: False
Q3) At what three points in time might a given expenditure be deductible? a. ______________________ b. ______________________
c. ______________________
Answer: 11ea87a7_1c44_f220_8726_6518ead4461d_TB2038_00
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3: Income Sources
Available Study Resources on Quizplus for this Chatper
152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/71136
Sample
Questions
Q1) Hector and Nicole are retired.During the current year,they receive $11,000 from a qualified pension plan,$3,000 of dividends on common stock holdings,$6,000 of tax-exempt interest,and $10,000 of Social Security benefits.Hector and Nicole's adjusted gross income is:
A)$14,000
B)$19,000
C)$24,000
D)$30,000
Answer: A
Q2) Ruth purchased an annuity contract for $10,000.When she turns 65,she will receive $150 a month for the rest of her life.The first $10,000 she receives is a return of her capital and is not taxable.
A)True
B)False
Answer: False
Q3) The holding period for receiving long-term capital gain treatment is 12 months or more.
A)True
B)False Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Income Exclusions
Available Study Resources on Quizplus for this Chatper
160 Verified Questions
160 Flashcards
Source URL: https://quizplus.com/quiz/71137
Sample Questions
Q1) Victor receives a $4,000 per year scholarship from Southern College.The college specifies that $2,500 is for tuition,books,supplies,and equipment for classes.The other $1,500 is for room and board.As part of the conditions of the scholarship,Victor must also work ten hours per week as a grader,for which he is paid $1,700 for the year.Of the total amount received,Victor will include in income:
A)$1,500
B)$1,700
C)$2,500
D)$3,200
E)$5,700
Q2) The income tax treatment of damages received from personal physical injuries is an application of the:
A)Ability-to-Pay Concept.
B)Administrative Convenience Concept.
C)All-inclusive Income Concept.
D)Capital Recovery Concept.
E)Wherewithal-to-Pay Concept.
Q3) David's employer laid him off for three months during the slow winter season.He collects $4,375 in unemployment compensation.
To view all questions and flashcards with answers, click on the resource link above.
Page 6
Chapter 5: Introduction to Business Expenses
Available Study Resources on Quizplus for this Chatper
166 Verified Questions
166 Flashcards
Source URL: https://quizplus.com/quiz/71138
Sample Questions
Q1) Due to a shortage of cash,East Coast Entertainment Company,an accrual basis taxpayer,could not pay its November 2016 utility bill on time.In February of 2017,East Coast Entertainment pays the utility bill.
I.East Coast can deduct the expense on either its 2016 or 2017 tax return.
II.East Coast cannot deduct the utility expense in 2016 because it is paid in 2017.
A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.
Q2) In order to take a business deduction,the taxpayer engaged in a business must be able to establish a business purpose for each expenditure.
A)True
B)False
Q3) An individual should be indifferent whether an expense is deducted for or deducted from adjusted gross income.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: Business Expenses
Available Study Resources on Quizplus for this Chatper
144 Verified Questions
144 Flashcards
Source URL: https://quizplus.com/quiz/71139
Sample Questions
Q1) Which of the following taxes paid by Trevor Products,Inc.can be deducted during 2016?
I.Real estate taxes.
II.Sales tax on purchase of new equipment.
A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.
Q2) To be deductible,employee compensation must be for services actually performed by the employee and the amount must be reasonable.
A)True
B)False
Q3) A taxpayer may use either the actual cost method or the standard mileage rate for deducting auto expenses.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: Losses-Deductions and Limitations
Available Study Resources on Quizplus for this Chatper
127 Verified Questions
127 Flashcards
Source URL: https://quizplus.com/quiz/71140
Sample Questions
Q1) Ricardo owns interests in 3 passive activities: A,B,and C.During the current year,activity A realizes income of $8,000 while activities B and C realize losses of $16,000 and $24,000,respectively.Determine the amount of suspended loss attributable to activity C.
A)$- 0 -
B)$ 8,000
C)$12,800
D)$19,200
E)$24,000
Q2) Capital asset
A)Limited to $3,000 annually for individuals.
B)When an asset is disposed of for less than its basis.
C)An excess of business deductions over business income.
D)A trade or business in which the taxpayer is not a material participant.
E)A loss that results from some sudden, unexpected, or unusual event.
F)Any asset that is not a receivable, inventory, or depreciable or real property used in a trade or business.
Q3) Why did Congress enact the at-risk rules?
Q4) Why do the wash sale rules apply to the sale of stock at a loss but not to the sale of stock at a gain?
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Taxation of Individuals
Available Study Resources on Quizplus for this Chatper
163 Verified Questions
163 Flashcards
Source URL: https://quizplus.com/quiz/71141
Sample Questions
Q1) Morris and Marianne have a $310,000 mortgage on their personal residence and a $90,000 mortgage on their mountain retreat.The interest on both of them qualifies as deductible qualified home mortgage interest.
A)True
B)False
Q2) Canfield is single,70 years old,and has no dependents.Canfield will not have to file a tax return in 2016 if:
I.his gross income does not exceed $11,900.
II.his only income is $4,000 of self-employment income.
A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.
Q3) In addition to the regular standard deduction taxpayers who are blind qualify for a second standard deduction of the same amount.
A)True
B)False
Q4) Explain the support test and the gross income test to be a qualifying relative.
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Acquisitions of Property
Available Study Resources on Quizplus for this Chatper
105 Verified Questions
105 Flashcards
Source URL: https://quizplus.com/quiz/71142
Sample Questions
Q1) Janet is the business manager for Greenville Auto Mart.She buys a new car from the dealership for $35,000.The basis of the car to the dealership was $30,000.The car lists for $42,00,but the dealer would sell the car for $40,000.What is Janet's basis in the new car?
A)$30,000
B)$35,000
C)$40,000
D)$42,000
E)$47,000
Q2) Kobe receives a gift of rare books valued at $10,000.The books have an adjusted basis of $6,000 to the donor.Several months later,Kobe sells the books to a professional collector for $7,000.What is Kobe' gain or (loss)on the sale?
A)No gain or (loss) is recognized
B)$1,000 gain
C)$4,000 gain
D)$1,000 loss
E)$3,000 loss
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Cost Recovery on Property: Depreciation, depletion,
and Amortization
Available Study Resources on Quizplus for this Chatper
110 Verified Questions
110 Flashcards
Source URL: https://quizplus.com/quiz/71143
Sample
Questions
Q1) Wilson Corporation purchases a factory building on September 29,2016,for $4,000,000 (exclusive of the amount allocated to the land).It elects the alternative depreciation system (ADS).What is the 2016 depreciation deduction?
A)$29,167
B)$30,000
C)$42,424
D)$70,833
E)$100,000
Q2) During 2016,Williams Company purchases and places in service office equipment with a cost of $40,000.The equipment is 7-year MACRS property.What is its 2016 depreciation deduction for purposes of the alternative minimum tax?
A)$2,000
B)$2,857
C)$3,000
D)$4,000
E)$5,714
Q3) Discuss why listed property gets special attention.
Q4) Why would a taxpayer ever elect to use the alternative depreciation system (ADS)rather than the MACRS?
Page 12
To view all questions and flashcards with answers, click on the resource link above.
Chapter 11: Property Dispositions
Available Study Resources on Quizplus for this Chatper
139 Verified Questions
139 Flashcards
Source URL: https://quizplus.com/quiz/71144
Sample Questions
Q1) Which of the following is not a capital asset?
A)Office building used by a CPA firm.
B)Antique automobile held by an antique automobile collector.
C)Land held for investment.
D)Stock held for investment.
Q2) Qualified Small Business stock gain
A)Stocks, bonds, options.
B)Depreciable real property.
C)All or part of any gain on sale is excluded.
D)Taxed at a maximum rate of 25%.
E)Gain or loss on the sale of artwork.
F)Depreciable tangible personal property.
G)Subject to full recapture as ordinary income of all depreciation taken.
H)Gain on real property attributable to excess depreciation is ordinary income.
Q3) George regularly invests unneeded business cash in Eli Lilly common stock.He has bought 200 shares of stock on May 1 of each year from 1986 through 2012.Because of an urgent need for cash,he sells 100 shares of the stock at an $850 gain on March 28,2015.Because the stock is held in a brokerage account,he did not have any paper shares of stock to surrender.He merely told his broker to sell 100 shares.
To view all questions and flashcards with answers, click on the resource link above.
Page 13
Chapter 12: Non-Recognition Transactions
Available Study Resources on Quizplus for this Chatper
112 Verified Questions
112 Flashcards
Source URL: https://quizplus.com/quiz/71145
Sample Questions
Q1) Which of the following can be income deferral transactions?
I.Sale of municipal bonds.
II.Involuntary conversions of property.
A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.
Q2) Commonalties of nonrecognition transactions include that I.gains on all transactions must be recognized when the taxpayer has the wherewithal-to-pay.
II.tax attributes carryover from the original asset to the replacement asset.
A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.
Q3) Discuss the type of property that is qualified replacement property for involuntary conversion provisions for gain deferrals.
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: Choice of Business Entity-General Tax and
Nontax Factorsformation
Available Study Resources on Quizplus for this Chatper
101 Verified Questions
101 Flashcards
Source URL: https://quizplus.com/quiz/71146
Sample Questions
Q1) Western Corporation began operations in 1999.Its fiscal year end is October 31.This date coincides with its natural business year.On June 2,2015,Western elects S corporation status.All of the corporate shareholders consented to the election.The earliest date the corporation is recognized as an S corporation is
A)November 1, 2017.
B)January 1, 2016.
C)June 2, 2016.
D)November 1, 2016.
E)December 31, 2016.
Q2) A partner in a limited liability partnership (LLP)
I.Has no liability for acts of malfeasance of any of the other partners.
II.Has no liability for the debts of the partnership.
A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.
Q3) Does the selection of a corporate entity ever make sense based on a desire for lower marginal tax rates? Discuss.
Page 15
To view all questions and flashcards with answers, click on the resource link above.
Chapter 14: Choice of Business Entity-Operations and Distributions
Available Study Resources on Quizplus for this Chatper
97 Verified Questions
97 Flashcards
Source URL: https://quizplus.com/quiz/71147
Sample Questions
Q1) Peter owns 30% of Bear Company,an electing S corporation.Peter's adjusted basis in the stock is $44,000 at the beginning of the current year.During the current year,Bear distributes a $60,000 dividend.Bear Company reports a $200,000 operating loss for the current year.If Peter is a material participant in Bear Company,how much of the loss can he deduct on his income tax return?
A)$-0-
B)$18,000
C)$26,000
D)$44,000
E)$60,000
Q2) Losses flow-through limited to basis plus the amount of any direct loans
A)Sole Proprietorship.
B)Partnership.
C)Corporation.
D)S Corporation.
Q3) Sales of property between a partner who owns more than 50% of a partnership's interest and the partnership are subject to the related party rules.
A)True
B)False
Page 16
To view all questions and flashcards with answers, click on the resource link above.
Chapter 15: Choice of Business Entity-Other Considerations
Available Study Resources on Quizplus for this Chatper
101 Verified Questions
101 Flashcards
Source URL: https://quizplus.com/quiz/71148
Sample Questions
Q1) Which of the following statements are correct concerning the general business credit?
I.The general business tax credit only applies to an individual or corporation with a tax liability in excess of $100,000.
II.The general business credit only applies to an individual or corporation that has a tax credit carryover or can claim more than one general business credit during the year.
A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.
Q2) Abraham establishes a Roth IRA at age 45 and contributes $5,500 per year for the next 25 years.Assume he meets the income limits during this period.The account balance is now $364,500 ($137,500 contributions,$227,000 earnings).Abraham would like to draw out the entire amount this year.How much tax would Abraham have to pay as a result of this decision?
To view all questions and flashcards with answers, click on the resource link above.
Chapter 16: Tax Research
Available Study Resources on Quizplus for this Chatper
92 Verified Questions
92 Flashcards
Source URL: https://quizplus.com/quiz/71149
Sample Questions
Q1) Which of the following regulations deals with Estate Tax?
A)Reg. Sec. 1.165-1
B)Reg. Sec. 20.2014-5
C)Reg. Sec. 25.2518-5
D)Reg. Sec. 301.7002-5
Q2) An interpretative regulation is issued when Congress specifically delegates the authority to the Treasury Department to write specific rules for a designated Code section.
A)True
B)False
Q3) Tara does not agree with a proposed deficiency of additional tax resulting from an examination of her individual income tax return.She has not been able to satisfactorily resolve her case within the administrative processes of the Internal Revenue Service.Which of the following courts may she petition without first making payment of the contested deficiency?
A)United States Tax Court.
B)United States District Court.
C)U.S. Court of Federal Claims.
D)Any of the above.
Q4) Describe the steps of the tax research process.
Page 18
To view all questions and flashcards with answers, click on the resource link above.