Question 1

The term "tax law" includes

Accepted Answer

A) Internal Revenue Code. 
B) Treasury Regulations. 
C) judicial decisions. 
D) All of the above. 
A) Internal Revenue Code. 
B) Treasury Regulations. 
C) judicial decisions. 
D) All of the above.

Question 2

The Sixteenth Amendment to the U.S.Constitution permits the passage of a federal income tax law.

Accepted Answer

A) True 
 B)False

Question 3

All of the following are classified as flow-through entities for tax purposes except

Accepted Answer

A) partnerships. 
B) C corporations. 
C) S corporations. 
D) limited liability companies. 
A) partnerships. 
B) C corporations. 
C) S corporations. 
D) limited liability companies.

Question 4

Flow-through entities do not have to file tax returns since they are not taxable entities.

Accepted Answer

A) True 
 B)False

Question 5

The unified transfer tax system

Accepted Answer

A) imposes a single tax upon transfers of property during an individual's lifetime only. 
B) imposes a single tax upon transfers of property during an individual's life and at death. 
C) imposes a single tax upon transfers of property only at an individual's death. 
D) none of above. 
A) imposes a single tax upon transfers of property during an individual's lifetime only. 
B) imposes a single tax upon transfers of property during an individual's life and at death. 
C) imposes a single tax upon transfers of property only at an individual's death. 
D) none of above.

Question 6

Describe the components of tax practice.

Accepted Answer

a.Tax compliance and procedure

Question 7

What does the statute of limitations mean? Describe the different statutes of limitations that apply to tax returns.

Accepted Answer

The statute of limitations is the period

Question 8

When property is transferred,the gift tax is based on

Accepted Answer

A) replacement cost of the transferred property. 
B) fair market value on the date of transfer. 
C) the transferor's original cost of the transferred property. 
D) the transferor's depreciated cost of the transferred property. 
A) replacement cost of the transferred property. 
B) fair market value on the date of transfer. 
C) the transferor's original cost of the transferred property. 
D) the transferor's depreciated cost of the transferred property.

Question 9

Which of the following is not an advantage of a limited liability company (LLC)?

Accepted Answer

A) limited liability for all members of a LLC 
B) ability to choose between taxation as a partnership or corporation 
C) default tax treatment as a corporation,unless otherwise elected 
D) All of the above are advantages of an LLC. 
A) limited liability for all members of a LLC 
B) ability to choose between taxation as a partnership or corporation 
C) default tax treatment as a corporation,unless otherwise elected 
D) All of the above are advantages of an LLC.

Question 10

Latashia reports $100,000 of gross income on her 2017 tax return,filed on the April 17,2018 due date.She omits $30,000 of income,but the error was not fraudulent.When does the statute of limitations for examining her tax return expire?

Accepted Answer

A) April 17,2020 
B) April 17,2021 
C) April 17,2024 
D) It never expires. 
A) April 17,2020 
B) April 17,2021 
C) April 17,2024 
D) It never expires.

Question 11

All of the following are executive (administrative)sources of tax law except

Accepted Answer

A) Internal Revenue Code. 
B) Income Tax Regulations. 
C) Revenue Rulings. 
D) Revenue Procedures. 
A) Internal Revenue Code. 
B) Income Tax Regulations. 
C) Revenue Rulings. 
D) Revenue Procedures.

Question 12

The primary objective of the federal income tax law is to achieve various economic and social policy objectives.

Accepted Answer

A) True 
 B)False

Question 13

Peyton has adjusted gross income of $2,000,000 on his 2017 tax return,filed April 17,2018,the due date.He accidentally failed to include $200,000 that he received for a television advertisement.How long does the IRS have to audit Peyton's federal tax return?

Accepted Answer

A) until April 17,2020 
B) until April 17,2021 
C) until April 17,2024 
D) The IRS can audit Peyton's return at any future date. 
A) until April 17,2020 
B) until April 17,2021 
C) until April 17,2024 
D) The IRS can audit Peyton's return at any future date.

Question 14

The terms "progressive tax" and "flat tax" are synonymous.

Accepted Answer

A) True 
 B)False

Question 15

In 2017,an estate is not taxable unless the sum of the taxable estate and taxable gifts made after 1976 exceeds

Accepted Answer

A) $2,141,800. 
B) $5,450,000. 
C) $5,000,000. 
D) $5,490,000. 
A) $2,141,800. 
B) $5,450,000. 
C) $5,000,000. 
D) $5,490,000.

Question 16

Kole earns $140,000 in 2017 in his job as a sales manager.What is his FICA tax?

Accepted Answer

A) $9,916 
B) $9,377 
C) $10,710 
D) $9,731 
A) $9,916 
B) $9,377 
C) $10,710 
D) $9,731

Question 17

Alan files his 2016 tax return on April 1,2017,shortly before the April 18 due date.His return contains no misstatements or omissions of income.The statute of limitations for changes to the return expires

Accepted Answer

A) April 1,2021. 
B) April 18,2020. 
C) April 18,2021. 
D) The statute of limitations never expires. 
A) April 1,2021. 
B) April 18,2020. 
C) April 18,2021. 
D) The statute of limitations never expires.

Question 18

Jeffery died in 2017 leaving a $16,000,000 gross estate.Six months after his death,the gross assets are valued at $16,100,000.In years prior to 2017 (but after 1976),Jeffery had made taxable gifts of $300,000.Of the $16,000,000 gross estate,estate assets valued at $3 million were transferred to his wife and $100,000 was used to pay administrative and funeral expenses.Jeffery had debts of $200,000,and the remainder of the estate was transferred to his children.
a.What is the amount of Jeffery's taxable estate?
b.What is the tax base for computing Jeffery's estate?
c.What is the amount of estate tax owed if the unified credit is $2,141,800?
d.Alternatively,if six months after his death,the gross assets in Jeffery's estate declined in value to $15,000,000,can the administrator of Jeffery's estate elect the alternate valuation date?

Accepted Answer

@#IMG-DLM& 
d.The alternate valuation date (six mo

Question 19

Charlotte pays $16,000 in tax deductible property taxes.Charlotte's marginal tax rate is 28%,effective tax rate is 22% and average rate is 25%.Charlotte's tax savings from paying the property tax is

Accepted Answer

A) $3,520. 
B) $4,000. 
C) $4,480. 
D) $11,520. 
A) $3,520. 
B) $4,000. 
C) $4,480. 
D) $11,520.

Question 20

In an S corporation,shareholders

Accepted Answer

A) are taxed on their proportionate share of earnings. 
B) are taxed only on dividends. 
C) may allocate income among themselves in order to consider special contributions. 
D) are only taxed on salaries. 
A) are taxed on their proportionate share of earnings. 
B) are taxed only on dividends. 
C) may allocate income among themselves in order to consider special contributions. 
D) are only taxed on salaries.

Exam 17: An Introduction to Taxation

The term "tax law" includes

The Sixteenth Amendment to the U.S.Constitution permits the passage of a federal income tax law.

All of the following are classified as flow-through entities for tax purposes except

Flow-through entities do not have to file tax returns since they are not taxable entities.

The unified transfer tax system

Describe the components of tax practice.

What does the statute of limitations mean? Describe the different statutes of limitations that apply to tax returns.

When property is transferred,the gift tax is based on

Which of the following is not an advantage of a limited liability company (LLC)?

Latashia reports $100,000 of gross income on her 2017 tax return,filed on the April 17,2018 due date.She omits $30,000 of income,but the error was not fraudulent.When does the statute of limitations for examining her tax return expire?

All of the following are executive (administrative)sources of tax law except

The primary objective of the federal income tax law is to achieve various economic and social policy objectives.

Peyton has adjusted gross income of $2,000,000 on his 2017 tax return,filed April 17,2018,the due date.He accidentally failed to include $200,000 that he received for a television advertisement.How long does the IRS have to audit Peyton's federal tax return?

The terms "progressive tax" and "flat tax" are synonymous.

In 2017,an estate is not taxable unless the sum of the taxable estate and taxable gifts made after 1976 exceeds

Kole earns $140,000 in 2017 in his job as a sales manager.What is his FICA tax?

Alan files his 2016 tax return on April 1,2017,shortly before the April 18 due date.His return contains no misstatements or omissions of income.The statute of limitations for changes to the return expires

Charlotte pays $16,000 in tax deductible property taxes.Charlotte's marginal tax rate is 28%,effective tax rate is 22% and average rate is 25%.Charlotte's tax savings from paying the property tax is

In an S corporation,shareholders

Tax Research

Corporate Formations and Capital Structure

the Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

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Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

Ustaxation of Foreign-Related Transactions

Determination of Tax

Gross Income: Inclusions

Gross Income: Exclusions

Property Transactions: Capital Gains and Losses

Deductions and Losses

Itemized Deductions

Losses and Bad Debts

Employee Expenses and Deferred Compensation

Depreciation, cost Recovery, amortization, and Depletion

Accounting Periods and Methods

Property Transactions: Nontaxable Exchanges

Property Transactions: Sec1231 and Recapture

Special Tax Computation Methods, tax Credits, and Payment of Tax

Tax Research

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