Chapter 1/2
Chapter 3/4
Chapter 14
Chapter 15
Chapter 16/17
100
A compulsory tax to support the cost of government is a ______?
Tax
100
When managers inquire to the IRS to understand how tax law should be applied, the IRS presents their rulings in the form of a _____?
Private letter ruling (PLR)
100
______deductions will always reduce taxable income while ______ deductions may have little or no effect on taxable income. A) Itemized; Above the line B) Child Support; Alimony C) Above the line; Itemized D) Alimony; Child support
C) Above the line; Itemized
100
Which of the following facts and circumstances is NOT how worker classification is decided? A) Degree of supervision B) GAAP accordance C) Materials provided D) Person versus job
B) GAAP accordance
100
What is the difference between a short-term and long-term capital gain or loss and how are they taxed
A long-term gain or loss is the sale of an asset that was owned for more than a year, while a short term was less than a year Short term gains or losses are taxed at regular rates, while long term gains or losses are taxed at preferential rates
200
Which of the following is not classified as a State or Local Tax? A) Unemployment Taxes B) Sales/Use tax C) Excise Tax D) State Income Tax
A) Unemployment tax
200
What are the three uncertainties of tax consequence?
Audit risk, tax law uncertainty, and marginal rate uncertainty
200
What is one way to avoid an underpayment penalty? A) Pay 90% of current year tax B) Pay 100% of prior year tax C) Wait until the IRS sends you your notice letter informing you of what your current year taxes are D) Both A and B E) Both B and C
D) Both A and B
200
Bill is a US citizen and lived in the US from birth until age 33. Now he is 43 and has been working in Saudi Arabia for the last 10 years. Bill is considered a ______?
Expatriates
200
What rate are collectibles taxed at?
28%
300
I am obligated to pay property taxes of 4% on my $298,000 house. Which of the following characterizes my house? A) Tax B) Rate C) Base D) Earmark
C) Base
300
If a company and their client engage in a transaction with the goal of minimizing their respective tax consequences, this is called a ______ ______ transaction. A) Private market B) Related party C) Public market D) None of the above
A) Private Market
300
AGI is reduced by the greater of a ______ or ______. A) Standard deduction; Allowable itemized deductions B) Allowable standard deduction; Marriage penalty deductions C) Mortgage payment deduction; Standard Deduction D) None of the above
A) Standard deduction; Allowable itemized deductions
300
As a General rule, fringe benefits are ______, but health insurance is a fringe benefit that is ______? A) Taxable; Non Taxable B) Non Taxable; Taxable
A) Taxable; Non Taxable
300
When transferring a gift, what value is placed upon the gift being transferred?
The amount of the gift equals the property’s fair market value
400
If Bill earns $100,000 per year and John earns $20,000 per year, but they both pay $10,000 in taxes per year, it is said that they do not have ______? A) Horizontal equity B) Regressive tax structures C) Vertical equity D) Fairness
C) Vertical Equity
400
What are the 4 tax planning variables?
Entity variable Time period variable Jurisdiction variable Character variable
400
If Jim is eligible for a tax benefit in which he is allowed a certain amount which reduces taxes paid, but not taxable income, then this is a ______. A) Tax deduction B) Tax credit C) Kiddie tax D) Filing status deduction
B) Tax Credit
400
Which of the following is not one of the three types of defined contribution plans? A) Profit Sharing Plans B) Employee Stock Ownership Plans C) 401k Plans D) Integrated Investment Portfolio Plan
D) Integrated investment portfolio plan
400
In a divorce settlement, what is the treatment of alimony?
Alimony is taxable to the recipient, and is deductible above-the line by the payer
500
Define the two standards of tax efficiency, and which one does the US use?
Classical- tax has a neutral effect on the market and does not affect taxpayer behavior Keynesian- government should use taxes to move the economy in a desired direction The US follows the Keynesian model
500
What is the economic substance doctrine?
a transaction that doesn’t change the taxpayers economic situation except by the tax savings from the transaction can be disregard by the IRS
500
Jim, 21 lives with Mark, 45. Mark provides Jim with about 62% of his financial support and Jim is not currently earning any income or going to school. Jim can be claimed as a ______ by Mark. A) Qualifying associate B) Qualifying relative C) Qualifying child D) Qualifying friend
B) Qualifying relative
500
Any Individual who earns compensation or self-employment income can save for a retirement through an ______? A) IRA B) 401K C) None of the above D) A and B
D) A and B
500
What are qualified tuition expenses and the amount the deduction is limited too?
Tuition and fees paid to attain a post-secondary education. The limit is $4,000
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