Question 1

The U.S. government has jurisdiction to tax individuals who are not U.S. citizens but who are permanent U.S. residents.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following does not characterize federal transfer taxes?

Accepted Answer

A)  The tax is imposed on individuals but not on corporations. 
B)  The tax is based on the value of property transferred by gift or at death. 
C)  The tax is a transaction tax. 
D)  All of the above characterize federal transfer taxes. 
A)  The tax is imposed on individuals but not on corporations. 
B)  The tax is based on the value of property transferred by gift or at death. 
C)  The tax is a transaction tax. 
D)  All of the above characterize federal transfer taxes.

Question 3

The city of Springvale imposes a net income tax on businesses operating within its jurisdiction. The tax equals 1% of income up to $100,000 and 1.5% of income in excess of $100,000. The Springvale Bar and Grill generated $782,000 net income this year. Compute its city income tax.

Accepted Answer

A)  $10,230 
B)  $11,230 
C)  $11,730 
D)  None of the above 
A)  $10,230 
B)  $11,230 
C)  $11,730 
D)  None of the above

Question 4

A tax is a payment to support the cost of government.

Accepted Answer

A) True 
 B)False

Question 5

The city of Mayfield charges individuals convicted of DWI (driving while intoxicated) $500 for the first conviction and $2,000 for any subsequent conviction. These charges are an example of a(n):

Accepted Answer

A)  User's fee 
B)  Transaction-based tax 
C)  Activity-based tax 
D)  Government penalty 
A)  User's fee 
B)  Transaction-based tax 
C)  Activity-based tax 
D)  Government penalty

Question 6

Which of the following is/are not a primary source of authority for the tax law?

Accepted Answer

A)  A revenue ruling published by the Internal Revenue Service 
B)  Section 162 of the Internal Revenue Code 
C)  Treasury Reg. §1.351-2 
D)  All of the above are primary sources of authority 
A)  A revenue ruling published by the Internal Revenue Service 
B)  Section 162 of the Internal Revenue Code 
C)  Treasury Reg. §1.351-2 
D)  All of the above are primary sources of authority

Question 7

Which of the following statements about sales and use taxes is true?

Accepted Answer

A)  If an individual pays a sales tax on the purchase of an item, she will not have to pay a use tax on the purchase. 
B)  An individual must pay both a sales tax and a use tax on the taxable purchase of an item. 
C)  Many states that impose a sales tax do not impose a complementary use tax. 
D)  None of the above is true. 
A)  If an individual pays a sales tax on the purchase of an item, she will not have to pay a use tax on the purchase. 
B)  An individual must pay both a sales tax and a use tax on the taxable purchase of an item. 
C)  Many states that impose a sales tax do not impose a complementary use tax. 
D)  None of the above is true.

Question 8

Ad valorem property taxes are the major source of revenue for local governments.

Accepted Answer

A) True 
 B)False

Question 9

The federal government does not levy property taxes or a general sales tax.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following federal taxes is not earmarked for a specific purpose?

Accepted Answer

A)  Employment taxes 
B)  Unemployment taxes 
C)  Transfer taxes 
D)  All of the above are earmarked taxes. 
A)  Employment taxes 
B)  Unemployment taxes 
C)  Transfer taxes 
D)  All of the above are earmarked taxes.

Question 11

Which of the following statements concerning sales taxes is false?

Accepted Answer

A)  Sales taxes apply to the purchase of most types of consumer goods. 
B)  Sales taxes apply to the purchase of most types of consumer services. 
C)  Sales taxes are collected by the seller when the sale is made. 
D)  Sales taxes imposed on the purchaser of retail items are consumption taxes. 
A)  Sales taxes apply to the purchase of most types of consumer goods. 
B)  Sales taxes apply to the purchase of most types of consumer services. 
C)  Sales taxes are collected by the seller when the sale is made. 
D)  Sales taxes imposed on the purchaser of retail items are consumption taxes.

Question 12

Ms. Penser resides in the city of Lanock, Tennessee. She owns 100% of the stock of PSW Inc., which is incorporated under Tennessee law and conducts business in six different local jurisdictions in Tennessee.
A. How many taxpayers are identified in the above statement of facts?
B. Identify the governments with jurisdiction to tax each of these taxpayers.

Accepted Answer

A. Ms. Penser is an individual taxpayer,

Question 13

A business that operates in more than one state is required to pay state income tax only to the state in which it is incorporated.

Accepted Answer

A) True 
 B)False

Question 14

Businesses that sell over the internet must collect sales tax only from purchasers living in a state in which the business has a physical presence.

Accepted Answer

A) True 
 B)False

Question 15

The incidence of a state sales tax levied on the purchase of retail goods is:

Accepted Answer

A)  Borne by the ultimate consumer of the goods. 
B)  Borne by the seller who must collect and remit the tax. 
C)  Borne by the manufacturer of the goods. 
D)  Borne by the government that levies the tax. 
A)  Borne by the ultimate consumer of the goods. 
B)  Borne by the seller who must collect and remit the tax. 
C)  Borne by the manufacturer of the goods. 
D)  Borne by the government that levies the tax.

Question 16

Mr. Dodd resides in a state with a 6% sales and use tax. He recently traveled to another state to buy a sailboat and paid that state's 4% sales tax. Which of the following statements is true?

Accepted Answer

A)  Mr. Dodd's use tax liability to his home state equals 2% of the purchase price of the furniture. 
B)  Mr. Dodd does not owe a use tax to his home state. 
C)  Mr. Dodd's use tax liability to his home state equals 6% of the purchase price of the furniture. 
D)  None of the above is true. 
A)  Mr. Dodd's use tax liability to his home state equals 2% of the purchase price of the furniture. 
B)  Mr. Dodd does not owe a use tax to his home state. 
C)  Mr. Dodd's use tax liability to his home state equals 6% of the purchase price of the furniture. 
D)  None of the above is true.

Question 17

Mrs. Renfru is a Brazilian citizen who permanently resides in Houston, Texas. Which of the following statements is true?

Accepted Answer

A)  The U.S. government has no jurisdiction to tax Mrs. Renfru because she is not a U.S. citizen. 
B)  The U.S. government has jurisdiction to tax Mrs. Renfru only on income that she earns from a source within the United States. 
C)  The U.S. government has jurisdiction to tax Mrs. Renfru. 
D)  Mrs. Renfru can elect whether to pay tax to the United States or to Brazil. 
A)  The U.S. government has no jurisdiction to tax Mrs. Renfru because she is not a U.S. citizen. 
B)  The U.S. government has jurisdiction to tax Mrs. Renfru only on income that she earns from a source within the United States. 
C)  The U.S. government has jurisdiction to tax Mrs. Renfru. 
D)  Mrs. Renfru can elect whether to pay tax to the United States or to Brazil.

Question 18

Which of the following taxes is not a significant source of revenue for local governments?

Accepted Answer

A)  Real property tax 
B)  Personal property tax 
C)  Employment tax 
D)  All of the above 
A)  Real property tax 
B)  Personal property tax 
C)  Employment tax 
D)  All of the above

Question 19

Which of the following statements about the Internal Revenue Code is false?

Accepted Answer

A)  The Internal Revenue Code has not been amended since 1986. 
B)  The Internal Revenue Code is part of federal statutory law. 
C)  The Internal Revenue Code consists of numerically organized sections. 
D)  Only Congress has the authority to amend the Internal Revenue Code. 
A)  The Internal Revenue Code has not been amended since 1986. 
B)  The Internal Revenue Code is part of federal statutory law. 
C)  The Internal Revenue Code consists of numerically organized sections. 
D)  Only Congress has the authority to amend the Internal Revenue Code.

Question 20

The property tax on a rent house owned by Mr. Janey increased by $1,200 this year. Mr. Janey increased the monthly rent charged to his tenant, Ms. Lacey, by $45. Who bears the incidence of the property tax increase?

Accepted Answer

A)  Mr. Janey 
B)  Ms. Lacey 
C)  Both Mr. Janey and Ms. Lacey 
D)  Neither Mr. Janey nor Ms. Lacey 
A)  Mr. Janey 
B)  Ms. Lacey 
C)  Both Mr. Janey and Ms. Lacey 
D)  Neither Mr. Janey nor Ms. Lacey

The U.S. government has jurisdiction to tax individuals who are not U.S. citizens but who are permanent U.S. residents.

Which of the following does not characterize federal transfer taxes?

The city of Springvale imposes a net income tax on businesses operating within its jurisdiction. The tax equals 1% of income up to $100,000 and 1.5% of income in excess of $100,000. The Springvale Bar and Grill generated $782,000 net income this year. Compute its city income tax.

A tax is a payment to support the cost of government.

The city of Mayfield charges individuals convicted of DWI (driving while intoxicated) $500 for the first conviction and $2,000 for any subsequent conviction. These charges are an example of a(n):

Which of the following is/are not a primary source of authority for the tax law?

Which of the following statements about sales and use taxes is true?

Ad valorem property taxes are the major source of revenue for local governments.

The federal government does not levy property taxes or a general sales tax.

Which of the following federal taxes is not earmarked for a specific purpose?

Which of the following statements concerning sales taxes is false?

A business that operates in more than one state is required to pay state income tax only to the state in which it is incorporated.

Businesses that sell over the internet must collect sales tax only from purchasers living in a state in which the business has a physical presence.

The incidence of a state sales tax levied on the purchase of retail goods is:

Mr. Dodd resides in a state with a 6% sales and use tax. He recently traveled to another state to buy a sailboat and paid that state's 4% sales tax. Which of the following statements is true?

Mrs. Renfru is a Brazilian citizen who permanently resides in Houston, Texas. Which of the following statements is true?

Which of the following taxes is not a significant source of revenue for local governments?

Which of the following statements about the Internal Revenue Code is false?

The property tax on a rent house owned by Mr. Janey increased by $1,200 this year. Mr. Janey increased the monthly rent charged to his tenant, Ms. Lacey, by $45. Who bears the incidence of the property tax increase?

Policy Standards for a Good Tax

Taxes As Transaction Costs

Maxims of Income Tax Planning

Tax Research

Taxable Income From Business Operations

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Nontaxable Exchanges

Sole Proprietorships, Partnerships, Llcs, and S Corporations

The Corporate Taxpayer

The Choice of Business Entity

Jurisdictional Issues in Business Taxation

The Individual Tax Formula

Compensation and Retirement Planning

Investment and Personal Financial Planning

Tax Consequences of Personal Activities

The Tax Compliance Process

Filters

Exam 1: Taxes and Taxing Jurisdictions

The U.S. government has jurisdiction to tax individuals who are not U.S. citizens but who are permanent U.S. residents.

Which of the following does not characterize federal transfer taxes?

The city of Springvale imposes a net income tax on businesses operating within its jurisdiction. The tax equals 1% of income up to $100,000 and 1.5% of income in excess of $100,000. The Springvale Bar and Grill generated $782,000 net income this year. Compute its city income tax.

A tax is a payment to support the cost of government.

The city of Mayfield charges individuals convicted of DWI (driving while intoxicated) $500 for the first conviction and $2,000 for any subsequent conviction. These charges are an example of a(n):

Which of the following is/are not a primary source of authority for the tax law?

Which of the following statements about sales and use taxes is true?

Ad valorem property taxes are the major source of revenue for local governments.

The federal government does not levy property taxes or a general sales tax.

Which of the following federal taxes is not earmarked for a specific purpose?

Which of the following statements concerning sales taxes is false?

A business that operates in more than one state is required to pay state income tax only to the state in which it is incorporated.

Businesses that sell over the internet must collect sales tax only from purchasers living in a state in which the business has a physical presence.

The incidence of a state sales tax levied on the purchase of retail goods is:

Mr. Dodd resides in a state with a 6% sales and use tax. He recently traveled to another state to buy a sailboat and paid that state's 4% sales tax. Which of the following statements is true?

Mrs. Renfru is a Brazilian citizen who permanently resides in Houston, Texas. Which of the following statements is true?

Which of the following taxes is not a significant source of revenue for local governments?

Which of the following statements about the Internal Revenue Code is false?

The property tax on a rent house owned by Mr. Janey increased by $1,200 this year. Mr. Janey increased the monthly rent charged to his tenant, Ms. Lacey, by $45. Who bears the incidence of the property tax increase?

Policy Standards for a Good Tax

Taxes As Transaction Costs

Maxims of Income Tax Planning

Tax Research

Taxable Income From Business Operations

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Nontaxable Exchanges

Sole Proprietorships, Partnerships, Llcs, and S Corporations

The Corporate Taxpayer

The Choice of Business Entity

Jurisdictional Issues in Business Taxation

The Individual Tax Formula

Compensation and Retirement Planning

Investment and Personal Financial Planning

Tax Consequences of Personal Activities

The Tax Compliance Process

Filters