2025 Individual Income Taxes Test Bank: Complete Exam Prep & Practice Questions for SWFT 48e (Chapters 1-20)

TEST BANK FOR
M M


M South-Western Federal Taxation 2025: Individual Income Taxes 48e Young
M M M M M M M M


Chapter 1-20
M




ChapterM 01M 2025MIndividuals
Answers Included
M

IndicateM whetherM theM statementM isM trueM orM fals
e.
1.MSalesMmadeMoverMtheMinternetMareMnotMexemptMfromMtheMapplicationMofMaMgeneralMsalesM(orMuse)Mtax.
a. True
b. False

2.MUponMauditMbyMtheMIRS,MFaithMisMassessedMaMdeficiencyMofM$40,000MofMwhichM$25,000MisMattributableMtoMnegligence
.
TheM20%MnegligenceMpenaltyMwillMapplyMtoM$25,000.
a. True
b. False

3.MUltimately,MmostMtaxesMareMpaidMbyMindividuals.
a. True
b. False

4.MEvenMifMpropertyMtaxMratesMareMnotMchanged,MtheMamountMofMadMvaloremMtaxesMimposedMonMrealtyMmayMnot
MremainMtheMsame.

a. True
b. False

5.MTheMprincipalMobjectiveMofMtheMFUTAMtaxMisMtoMprovideMsomeMmeasureMofMretirementMsecurity.
a. True
b. False

6.MIfMmoreMIRSMauditsMareMproducingMaMhigherMnumberMofMnoM changeMresults,MthisMindicatesMincreasedMcomplia
nceMonMtheMpartMofMtaxpayers.
a. True
b. False

7.MAMsafeMandMeasyMwayMforMaMtaxpayerMtoMavoidMlocalMandMstateMsalesMtaxesMisMtoMmakeMtheMpurchaseMinMaM
stateMthatMleviesMnoMsuchMtaxes.
a. True
b. False

8.MAMcalendarMyearMtaxpayerMfilesMhisM2023MFederalMincomeMtaxMreturnMonMMarchM4,M2024.MTheMreturnMreflect
a.M True
b.MFals
e
9.MAMtaxMcutMenactedMbyMCongressMthatMcontainsMaMsunsetM provisionMwillMmakeMtheMtaxMcutMtemp
orary.
a.M True
b.MFalse

, sManMoverpaymentMofM$6,000,MandMtheMtaxpayerMrequestsMaMrefundMofMthisMamount.MTheMrefundMisMpaidMonMM
ayM16,M2024.MTheMrefundMneedMnotMincludeMinterest.




a.M True
b.MFals
e
9.MAMtaxMcutMenactedMbyMCongressMthatMcontainsMaMsunsetM provisionMwillMmakeMtheMtaxMcutMtemp
orary.
a.M True
b.MFalse

, 10.MForMFederalMincomeMtaxMpurposes,MthereMneverMhasMbeenMaMgeneralMamnestyMperiod.
a. True
b. False

11.MToMlessenMorMeliminateMtheMeffectMofMmultipleMtaxation,MaMtaxpayerMwhoMisMsubjectMtoMbothMforeignMandMU.S.M
incomeMtaxesMonMtheMsameMincomeMisMallowedMeitherMaMdeductionMorMaMcreditMforMtheMforeignMtaxMpaid.
a. True
b. False

12.MBecauseMitMisMconsistentMwithMtheMwherewithalMtoMpayMconcept,MtheMtaxMlawMrequiresMaMsellerMtoMrecognizeMa
MgainMinMtheMyearMtheMinstallmentMsaleMoccurs.

a. True
b. False

13.MTheMamountMofMaMtaxpayer’sMitemizedMdeductionsMwillMincreaseMtheMchanceMofMbeingMauditedMbyMtheMIRS.
a. True
b. False

14.MInM2024,MJosé,MaMwidower,MsellsMlandM(fairMmarketMvalueMofM$100,000)MtoMhisMdaughter,MLinda,MforM$50,000.MJ
oséMhasMnotMmadeMaMtaxableMgift.
a. True
b. False

15.MForMomissionsMfromMgrossMincomeMinMexcessMofM25%MofMthatMreported,MthereMisMnoMstatuteMofMlimitati
onsMonMadditionalMincomeMtaxMassessmentsMbyMtheMIRS.
a. True
b. False

16.MStealthMtaxesMhaveMtheMeffectMofMgeneratingMadditionalMtaxesMfromMallMtaxpayers.
a. True
b. False

17.MJason’sMbusinessMwarehouseMisMdestroyedMbyMfire.MBecauseMtheMinsuranceMproceedsMexceedMtheMbasisMofMthe
Mproperty,MaMgainMresults.MIfMJasonMshortlyMreinvestsMtheMproceedsMinMaMnewMwarehouse,MnoMgainMisMrecognize

dMdueMtoMtheMapplicationMofMtheMwherewithalMtoMpayMconcept.
a. True
b. False

18.MAnMinheritanceMtaxMisMaMtaxMonMaMdecedent’sMrightMtoMpassMpropertyMatMdeath.
a.M True
b.MFals
e
19.MWhenMinterestMisMchargedMonMaMdeficiency,ManyMpartMofMaMmonthMcountsMasMaMfullM
month.
a.M True
b.MFalse

, Name: Class: Date:

ChapterM 01M 2025MIndividual
s
20.MTheMmajorityMofMIRSMauditsMareMhandledMbyMcorrespondence.
a. True
b. False

21.MTheMratificationMofMtheMSixteenthMAmendmentMtoMtheMU.S.MConstitutionMwasMnecessaryMtoMvalidateMtheMF
ederalMincomeMtaxMonMcorporations.
a. True
b. False

22.MOneMofMtheMmajorMreasonsMforMtheMenactmentMofMtheMFederalMestateMtaxMwasMtoMpreventMlargeMamountsMof
MwealthMfromMbeingMaccumulatedMwithinMaMfamilyMunit.

a. True
b. False

23.MUnderMstateMamnestyMprograms,MallMdelinquentMandMunpaidMincomeMtaxesMareMforgiven.
a. True
b. False

24.MInMpreparingManMincomeMtaxMreturn,MtheMuseMofMaMclient’sMestimatesMisMnotMpermitted.
a. True
b. False

25.MTheMFederalMestateMandMgiftMtaxesMareMexamplesMofMprogressiveMrateM taxes.
a. True
b. False

26.MDuringManyMmonthMinMwhichMbothMtheMfailureMtoMfileMpenaltyMandMtheMfailureMtoMpayMpenaltyMapply,MtheMfailur
eMtoMfileMpenaltyMisMincreasedMbyMtheMamountMofMtheMfailureMtoMpayMpenalty.
a. True
b. False

27.MForMtheMnegligenceMpenaltyMtoMapply,MtheMunderpaymentMmustMbeMcausedMbyMintentionalMdisregardMofMrul
esMandMregulationsMwithoutMintentMtoMdefraud.
a. True
b. False

28.MUnderMClint’sMwill,MallMofMhisMpropertyMpassesMtoMeitherMtheMLutheranMChurchMorMtoMhisMspouse.MNoMFedera
lMestateMtaxMwillMbeMdueMonMClint’sMdeath.
a. True
b. False

29.MForMstateMincomeMtaxMpurposes,MsomeMstatesMallowMaMcreditMforMdependentsMratherMthanMaMdeduction.
a. True
b. False




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