?
A?
VI
TU
_S
ED
OV
PR
AP
,AP
TABLE OF CONTENTS
R
PR Fundamentals of Taxation (2026 Release) - Test Bank
U
Ana Cruz, Michael Deschamps, Frederick Niswander, Debra Prendergast, Dan Schisler
SE
Chapter 1
OV
Introduction to Taxation, the Income Tax Formula, and Form 1040
IS
Chapter 2 Expanded Tax Formula, Form 1040, and Basic Concepts
Chapter 3 Gross Income: Inclusions and Exclusions
O
Chapter 4
ED
Adjustments for Adjusted Gross Income
Chapter 5 Itemized Deductions
N
N
Chapter 6 Self-Employed Business Income (Line 3 of Schedule 1 and Schedule C)
_S
O
Chapter 7 Capital Gains and Other Sales of Property (Schedule D and Form 4797)
Chapter 8 Rental Property, Royalties, and Income from Flow-Through Entities (Line 5, Schedule 1,
C
and Schedule E)
TU
ED
Chapter 9 Tax Credits (Form 1040, Lines 19, 20, 27 through 29, and 31, Schedule 3, Lines 1 through
14)
Chapter 10 Payroll Taxes
VI
M
Chapter 11 Retirement and Other Tax-Deferred Plans and Annuities
Chapter 12 Special Property Transactions
A?
Chapter 13 At-Risk/Passive Activity Loss Rules and the Individual Alternative Minimum Tax
Chapter 14 Partnership Taxation
Chapter 15 Corporate Taxation
?
,Chapter 1
AP
Student name:
1) The U.S. individual income tax system is an example of a progressive tax rate structure.
⊚ true
PR ⊚ false
2) A proportional tax rate structure is a tax where the tax rate remains at the same rate
OV
regardless of the tax base.
⊚ true
⊚ false
ED
3) Under a flat tax, the marginal tax rate and the average tax rate are different.
⊚ true
⊚ false _S
4) State and local taxes levied on either property or sales are examples of progressive taxes.
⊚ true
⊚ false
TU
5) With a regressive tax, the tax rate increases as the tax base gets larger.
⊚ true
⊚ false
VI
6) The marginal tax rate is the total tax liability divided by the taxable income.
A?
⊚ true
⊚ false
?
7) The average tax rate is the total tax liability divided by the taxable income.
⊚ true
⊚ false
, Chapter 1
AP
8) All individual income tax returns follow the basic structure of the simplified tax formula.
⊚ true
PR ⊚ false
9) With a progressive rate structure, the average tax rate is always smaller than the marginal tax
rate. OV
⊚ true
⊚ false
10) At high levels of taxable income, the average tax rate and the marginal tax rate will always
be the same.
ED
⊚ true
⊚ false _S
11) Wages, salaries, and tips are compensation for services rendered. However, commissions,
bonuses, and severance pay are not taxable. TU
⊚ true
⊚ false
12) Federal unemployment compensation benefits are not taxable.
⊚ true
VI
⊚ false A?
13) A single taxpayer cannot file a Form 1040 if she is age 65 or older.
⊚ true ?
⊚ false
14) One of the criteria to file a Form 1040 is that the total taxable income of the taxpayer cannot
exceed $100,000.
⊚ true
⊚ false
A?
VI
TU
_S
ED
OV
PR
AP
,AP
TABLE OF CONTENTS
R
PR Fundamentals of Taxation (2026 Release) - Test Bank
U
Ana Cruz, Michael Deschamps, Frederick Niswander, Debra Prendergast, Dan Schisler
SE
Chapter 1
OV
Introduction to Taxation, the Income Tax Formula, and Form 1040
IS
Chapter 2 Expanded Tax Formula, Form 1040, and Basic Concepts
Chapter 3 Gross Income: Inclusions and Exclusions
O
Chapter 4
ED
Adjustments for Adjusted Gross Income
Chapter 5 Itemized Deductions
N
N
Chapter 6 Self-Employed Business Income (Line 3 of Schedule 1 and Schedule C)
_S
O
Chapter 7 Capital Gains and Other Sales of Property (Schedule D and Form 4797)
Chapter 8 Rental Property, Royalties, and Income from Flow-Through Entities (Line 5, Schedule 1,
C
and Schedule E)
TU
ED
Chapter 9 Tax Credits (Form 1040, Lines 19, 20, 27 through 29, and 31, Schedule 3, Lines 1 through
14)
Chapter 10 Payroll Taxes
VI
M
Chapter 11 Retirement and Other Tax-Deferred Plans and Annuities
Chapter 12 Special Property Transactions
A?
Chapter 13 At-Risk/Passive Activity Loss Rules and the Individual Alternative Minimum Tax
Chapter 14 Partnership Taxation
Chapter 15 Corporate Taxation
?
,Chapter 1
AP
Student name:
1) The U.S. individual income tax system is an example of a progressive tax rate structure.
⊚ true
PR ⊚ false
2) A proportional tax rate structure is a tax where the tax rate remains at the same rate
OV
regardless of the tax base.
⊚ true
⊚ false
ED
3) Under a flat tax, the marginal tax rate and the average tax rate are different.
⊚ true
⊚ false _S
4) State and local taxes levied on either property or sales are examples of progressive taxes.
⊚ true
⊚ false
TU
5) With a regressive tax, the tax rate increases as the tax base gets larger.
⊚ true
⊚ false
VI
6) The marginal tax rate is the total tax liability divided by the taxable income.
A?
⊚ true
⊚ false
?
7) The average tax rate is the total tax liability divided by the taxable income.
⊚ true
⊚ false
, Chapter 1
AP
8) All individual income tax returns follow the basic structure of the simplified tax formula.
⊚ true
PR ⊚ false
9) With a progressive rate structure, the average tax rate is always smaller than the marginal tax
rate. OV
⊚ true
⊚ false
10) At high levels of taxable income, the average tax rate and the marginal tax rate will always
be the same.
ED
⊚ true
⊚ false _S
11) Wages, salaries, and tips are compensation for services rendered. However, commissions,
bonuses, and severance pay are not taxable. TU
⊚ true
⊚ false
12) Federal unemployment compensation benefits are not taxable.
⊚ true
VI
⊚ false A?
13) A single taxpayer cannot file a Form 1040 if she is age 65 or older.
⊚ true ?
⊚ false
14) One of the criteria to file a Form 1040 is that the total taxable income of the taxpayer cannot
exceed $100,000.
⊚ true
⊚ false
