Question 1

Which of the following represents the largest percentage of state tax revenue?

Accepted Answer

A)  Sales tax 
B)  Individual income tax 
C)  Other 
D)  Property tax 
E)  None of these 
A)  Sales tax 
B)  Individual income tax 
C)  Other 
D)  Property tax 
E)  None of these

Question 2

Estimated tax payments are one way the federal income tax system addresses the "certainty" criterion in evaluating tax systems.

Accepted Answer

A) True 
 B)False

Question 3

Heather, a single taxpayer who files as a head of household, earns $60,000 in taxable income and $5,000 in interest from an investment in city of Oxford Bonds. Using the U.S. tax rate schedule for year 2014, how much federal tax will she owe? What is her average tax rate? What is her effective tax rate? What is her current marginal tax rate? If Heather has an additional $20,000 of tax deductions, what is her marginal tax rate on these deductions? (Round the tax rates to 2 decimal places, e.g., .12345 as 12.35%)

Accepted Answer

Heather will owe $9,412.50 in federal in

Question 4

The city of Granby, Colorado recently enacted a 1.5% surcharge on vacation cabin rentals that will help pay for the city's new elementary school. This surcharge is an example of ________.

Accepted Answer

A)  A sin tax to discourage undesirable behavior 
B)  A government fine 
C)  An earmarked tax 
D)  Both a sin tax to discourage undesirable behavior and an earmarked tax 
E)  None of these 
A)  A sin tax to discourage undesirable behavior 
B)  A government fine 
C)  An earmarked tax 
D)  Both a sin tax to discourage undesirable behavior and an earmarked tax 
E)  None of these

Question 5

In a proportional (flat) tax rate system, the marginal tax rate will always equal the average tax rate.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is true?

Accepted Answer

A)  Municipal bond interest is subject to explicit federal tax 
B)  Municipal bond interest is subject to implicit tax 
C)  Municipal bonds typically pay a higher interest rate than corporate bonds with similar risk 
D)  All of these are true 
E)  None of these is true 
A)  Municipal bond interest is subject to explicit federal tax 
B)  Municipal bond interest is subject to implicit tax 
C)  Municipal bonds typically pay a higher interest rate than corporate bonds with similar risk 
D)  All of these are true 
E)  None of these is true

Question 7

Which of the following is not an example of a graduated tax rate structure?

Accepted Answer

A)  Progressive tax rate structure 
B)  Proportional tax rate structure 
C)  U.S. Federal Income Tax 
D)  Regressive tax rate structure 
E)  None of these 
A)  Progressive tax rate structure 
B)  Proportional tax rate structure 
C)  U.S. Federal Income Tax 
D)  Regressive tax rate structure 
E)  None of these

Question 8

The main difficulty in calculating an income tax is determining the correct amount of the tax base.

Accepted Answer

A) True 
 B)False

Question 9

Nelson has the choice between investing in a city of Fruithurst bond at 4% or a J.B. Ribs, Inc. bond at 6.5%. Assuming that both bonds have the same non-tax characteristics and that Nelson has a 40% marginal tax rate, in which bond should he invest? What interest rate offered by J.B. Ribs, Inc. would make Nelson indifferent between investing in the two bonds?

Accepted Answer

Nelson's after tax rate of return on the

Question 10

Jed Clampett is expanding his family-run beer distributorship into Georgia or Tennessee. His parents began the business many years ago and now three generations of Clampetts work in the family business. Jed will relocate the entire family (his parents, spouse, children, etc.) to either state after the move. What types of taxes may influence his decision of where to locate his business? What non-tax factors may influence the decision?

Accepted Answer

Taxes will affect several aspects of Jed

Question 11

Which of the following federal government actions would make sense if a tax system fails to provide sufficient tax revenue?

Accepted Answer

A)  Issue treasury bonds 
B)  Cut funding to various federal projects 
C)  Increase federal spending 
D)  Issue treasury bonds and cut funding to various federal projects but not increase federal spending 
E)  None of these 
A)  Issue treasury bonds 
B)  Cut funding to various federal projects 
C)  Increase federal spending 
D)  Issue treasury bonds and cut funding to various federal projects but not increase federal spending 
E)  None of these

Which of the following represents the largest percentage of state tax revenue?

Estimated tax payments are one way the federal income tax system addresses the "certainty" criterion in evaluating tax systems.

The city of Granby, Colorado recently enacted a 1.5% surcharge on vacation cabin rentals that will help pay for the city's new elementary school. This surcharge is an example of ________.

In a proportional (flat) tax rate system, the marginal tax rate will always equal the average tax rate.

Which of the following statements is true?

Which of the following is not an example of a graduated tax rate structure?

The main difficulty in calculating an income tax is determining the correct amount of the tax base.

Which of the following federal government actions would make sense if a tax system fails to provide sufficient tax revenue?

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Individual Deductions

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Investments

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Us Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning of the Cfa Institute

Filters

Exam 1: An Introduction to Tax

Which of the following represents the largest percentage of state tax revenue?

Estimated tax payments are one way the federal income tax system addresses the "certainty" criterion in evaluating tax systems.

The city of Granby, Colorado recently enacted a 1.5% surcharge on vacation cabin rentals that will help pay for the city's new elementary school. This surcharge is an example of ________.

In a proportional (flat) tax rate system, the marginal tax rate will always equal the average tax rate.

Which of the following statements is true?

Which of the following is not an example of a graduated tax rate structure?

The main difficulty in calculating an income tax is determining the correct amount of the tax base.

Which of the following federal government actions would make sense if a tax system fails to provide sufficient tax revenue?

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Individual Deductions

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Investments

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Us Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning of the Cfa Institute

Filters