Question 1

Dividends paid from most U.S.corporations are taxed at the same rate as the recipients' salaries and wages.

Accepted Answer

A) True 
 B)False

Question 2

Horizontal equity means that

Accepted Answer

A) taxpayers with the same amount of income should pay the same amount of tax. 
B) taxpayers with larger amounts of income should pay more tax than taxpayers with lower amounts of income. 
C) all taxpayers should pay the same tax. 
D) None of the above. 
A) taxpayers with the same amount of income should pay the same amount of tax. 
B) taxpayers with larger amounts of income should pay more tax than taxpayers with lower amounts of income. 
C) all taxpayers should pay the same tax. 
D) None of the above.

Question 3

During the current tax year,Frank Corporation generated gross income of $1,900,000 and had ordinary and necessary deductions of $1,400,000.What is the amount of Frank Corporation's corporate income tax for the year?

Accepted Answer

Taxable income is $1,900,000 -

Question 4

In a limited liability partnership,a partner is not liable for his partner's acts of negligence or misconduct.

Accepted Answer

A) True 
 B)False

Question 5

Limited liability company members (owners)are responsible for the liabilities of their limited liability company.

Accepted Answer

A) True 
 B)False

Question 6

If a taxpayer's total tax liability is $30,000,taxable income is $100,000,and economic income is $120,000,the average tax rate is 30 percent.

Accepted Answer

A) True 
 B)False

Question 7

Generally,the statute of limitations is three years from the later of the date the tax return is filed or the due date.

Accepted Answer

A) True 
 B)False

Question 8

Until about 100 years ago,attempts to impose a federal income tax were ruled unconstitutional.The amendment to the U.S.Constitution allowing the imposition of a federal income tax is the

Accepted Answer

A) Second Amendment. 
B) Thirteenth Amendment. 
C) Sixteenth Amendment. 
D) Nineteenth Amendment. 
A) Second Amendment. 
B) Thirteenth Amendment. 
C) Sixteenth Amendment. 
D) Nineteenth Amendment.

Question 9

Sarah contributes $25,000 to a church.Sarah's marginal tax rate is 35% while her average tax rate is 25%.After considering her tax savings,Sarah's contribution costs

Accepted Answer

A) $6,250. 
B) $8,750. 
C) $16,250. 
D) $18,750. 
A) $6,250. 
B) $8,750. 
C) $16,250. 
D) $18,750.

Question 10

Which of the following is not a taxpaying entity?

Accepted Answer

A) C Corporation 
B) Partnership 
C) Individual 
D) All of the above are taxpayers. 
A) C Corporation 
B) Partnership 
C) Individual 
D) All of the above are taxpayers.

Question 11

Mia is self-employed as a consultant.During 2017,Mia earned $180,000 in self-employment income.What is Mia's self-employment tax?

Accepted Answer

The answer of Mia is self-employed as a consultant.During 2017,Mia...

Question 12

If a taxpayer's total tax liability is $4,000,taxable income is $20,000,and total economic income is $40,000,then the effective tax rate is 20 percent.

Accepted Answer

A) True 
 B)False

Question 13

Frederick failed to file his 2017 tax return on a timely basis.In fact,he filed his 2017 income tax return on October 31,2018, (the due date was April 17,2018)and paid the amount due at that time.He failed to make timely extensions.Below are amounts from his 2017 return:
   Frederick sent a check for $1,582 in payment of his liability.He thinks that he has met all of his financial obligations to the government for 2017.For what additional amounts may Frederick be liable assuming any applicable interest rate is 6%?

Accepted Answer

Since Frederick's return is filed late a

Question 14

Limited liability companies may elect to be taxed as corporations.

Accepted Answer

A) True 
 B)False

Question 15

When returns are processed,they are scored to determine their potential for yielding additional tax revenues.This program is called

Accepted Answer

A) Taxpayer Compliance Measurement Program. 
B) Discriminant Function System. 
C) Standard Audit Program. 
D) Field Audit Program. 
A) Taxpayer Compliance Measurement Program. 
B) Discriminant Function System. 
C) Standard Audit Program. 
D) Field Audit Program.

Question 16

Briana,who is single,has taxable income for 2017 of $78,000,resulting in a total tax of $15,239.Her total economic income is $98,000.Briana's average tax rate and effective tax rate are,respectively,

Accepted Answer

A) 19.54% and 15.55%. 
B) 25% and 28%. 
C) 19.54% and 25%. 
D) 15.55% and 19.54%. 
A) 19.54% and 15.55%. 
B) 25% and 28%. 
C) 19.54% and 25%. 
D) 15.55% and 19.54%.

Question 17

Individuals are the principal taxpaying entities in the federal income tax system.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is not a social objective of the tax law?

Accepted Answer

A) prohibition of a deduction for illegal bribes,fines and penalties 
B) a deduction for charitable contributions 
C) an exclusion for interest earned by large businesses 
D) creation of tax-favored pension plans 
A) prohibition of a deduction for illegal bribes,fines and penalties 
B) a deduction for charitable contributions 
C) an exclusion for interest earned by large businesses 
D) creation of tax-favored pension plans

Question 19

Which of the following is not one of Adam Smith's canons of taxation?

Accepted Answer

A) equity 
B) convenience 
C) certainty 
D) economic stimulation 
A) equity 
B) convenience 
C) certainty 
D) economic stimulation

Question 20

Which of the following steps,related to a tax bill,occurs first?

Accepted Answer

A) signature or veto by the President of the United States 
B) consideration by the Senate 
C) consideration by the House Ways and Means Committee 
D) consideration by the Joint Conference Committee 
A) signature or veto by the President of the United States 
B) consideration by the Senate 
C) consideration by the House Ways and Means Committee 
D) consideration by the Joint Conference Committee

Exam 17: An Introduction to Taxation

Dividends paid from most U.S.corporations are taxed at the same rate as the recipients' salaries and wages.

Horizontal equity means that

During the current tax year,Frank Corporation generated gross income of $1,900,000 and had ordinary and necessary deductions of $1,400,000.What is the amount of Frank Corporation's corporate income tax for the year?

In a limited liability partnership,a partner is not liable for his partner's acts of negligence or misconduct.

Limited liability company members (owners)are responsible for the liabilities of their limited liability company.

If a taxpayer's total tax liability is $30,000,taxable income is $100,000,and economic income is $120,000,the average tax rate is 30 percent.

Generally,the statute of limitations is three years from the later of the date the tax return is filed or the due date.

Until about 100 years ago,attempts to impose a federal income tax were ruled unconstitutional.The amendment to the U.S.Constitution allowing the imposition of a federal income tax is the

Sarah contributes $25,000 to a church.Sarah's marginal tax rate is 35% while her average tax rate is 25%.After considering her tax savings,Sarah's contribution costs

Which of the following is not a taxpaying entity?

Mia is self-employed as a consultant.During 2017,Mia earned $180,000 in self-employment income.What is Mia's self-employment tax?

If a taxpayer's total tax liability is $4,000,taxable income is $20,000,and total economic income is $40,000,then the effective tax rate is 20 percent.

Limited liability companies may elect to be taxed as corporations.

When returns are processed,they are scored to determine their potential for yielding additional tax revenues.This program is called

Briana,who is single,has taxable income for 2017 of $78,000,resulting in a total tax of $15,239.Her total economic income is $98,000.Briana's average tax rate and effective tax rate are,respectively,

Individuals are the principal taxpaying entities in the federal income tax system.

Which of the following is not a social objective of the tax law?

Which of the following is not one of Adam Smith's canons of taxation?

Which of the following steps,related to a tax bill,occurs first?

Tax Research

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