WGU C239 Advanced Taxation Questions with
100% Correct Answers
Jason's business warehouse is destroyed by fire. Because the insurance proceeds exceed
the basis of the property, a gain results. If Jason shortly reinvests the proceeds in a new
warehouse, no gain is recognized due to the application of the wherewithal to pay
concept.
True
Which, if any, of the following transactions will decrease a taxing jurisdiction's ad
valorem tax revenue imposed on real estate?
a. A public school is razed and turned into a city park.
b. A tax holiday is granted to an out-of-state business that is searching for a new factory
site.
c. An abandoned church is converted to a restaurant.
d. A local university sells a dormitory that will be converted for use as an apartment
building.
B: "A tax holiday is granted to an out-of-state business that is searching for a new factory
site" will decrease it after the tax holiday is granted. "An abandoned church is converted to a
restaurant" will increase taxes because the church was abandoned and previously exempt. "A
public school is razed and turned into a city park" converts one tax-exempt property (i.e.,
school) into another (i.e., public park). "A local university sells a dormitory that will be
converted for use as an apartment building" probably places the building on the tax rolls
because it is no longer owned by a tax-exempt institution.
A characteristic of FUTA is that:
a. It is applicable to spouses of employees but not to any children under age 18.
, b. It is imposed solely on the employee.
c. Compliance requires following guidelines issued by both state and Federal regulatory
authorities.
d. It is imposed on both employer and employee.
C: FUTA is imposed only on the employer ("It is imposed on both employer and employee"
and "It is imposed solely on the employee"). "It is applicable to spouses of employees but not
to any children under age 18" refers to FICA. Because the administration of FUTA is shared
by Federal and state governments, employers must comply with the rules issued by each
("Compliance requires following guidelines issued by both state and Federal regulatory
authorities").
A major advantage of a flat tax type of income tax is its simplicity
True - Fewer deductions are allowed under the flat tax making it simpler than the current
Federal income tax
Which, if any, of the following is a typical characteristic of an ad valorem tax on
personalty?
a. Taxpayer compliance is greater for personal use property than for business use
property.
b. The tax on intangibles generates considerable revenue since it is difficult for
taxpayers to avoid.
c. The tax on automobiles sometimes considers the age of the vehicle.
d. Most states impose a tax on intangibles.
C: Taxpayer compliance is greater with business use property ("Taxpayer compliance is
greater for personal use property than for business use property"). Very few states impose a
tax on intangibles ("Most states impose a tax on intangibles") because it is easily avoided and
100% Correct Answers
Jason's business warehouse is destroyed by fire. Because the insurance proceeds exceed
the basis of the property, a gain results. If Jason shortly reinvests the proceeds in a new
warehouse, no gain is recognized due to the application of the wherewithal to pay
concept.
True
Which, if any, of the following transactions will decrease a taxing jurisdiction's ad
valorem tax revenue imposed on real estate?
a. A public school is razed and turned into a city park.
b. A tax holiday is granted to an out-of-state business that is searching for a new factory
site.
c. An abandoned church is converted to a restaurant.
d. A local university sells a dormitory that will be converted for use as an apartment
building.
B: "A tax holiday is granted to an out-of-state business that is searching for a new factory
site" will decrease it after the tax holiday is granted. "An abandoned church is converted to a
restaurant" will increase taxes because the church was abandoned and previously exempt. "A
public school is razed and turned into a city park" converts one tax-exempt property (i.e.,
school) into another (i.e., public park). "A local university sells a dormitory that will be
converted for use as an apartment building" probably places the building on the tax rolls
because it is no longer owned by a tax-exempt institution.
A characteristic of FUTA is that:
a. It is applicable to spouses of employees but not to any children under age 18.
, b. It is imposed solely on the employee.
c. Compliance requires following guidelines issued by both state and Federal regulatory
authorities.
d. It is imposed on both employer and employee.
C: FUTA is imposed only on the employer ("It is imposed on both employer and employee"
and "It is imposed solely on the employee"). "It is applicable to spouses of employees but not
to any children under age 18" refers to FICA. Because the administration of FUTA is shared
by Federal and state governments, employers must comply with the rules issued by each
("Compliance requires following guidelines issued by both state and Federal regulatory
authorities").
A major advantage of a flat tax type of income tax is its simplicity
True - Fewer deductions are allowed under the flat tax making it simpler than the current
Federal income tax
Which, if any, of the following is a typical characteristic of an ad valorem tax on
personalty?
a. Taxpayer compliance is greater for personal use property than for business use
property.
b. The tax on intangibles generates considerable revenue since it is difficult for
taxpayers to avoid.
c. The tax on automobiles sometimes considers the age of the vehicle.
d. Most states impose a tax on intangibles.
C: Taxpayer compliance is greater with business use property ("Taxpayer compliance is
greater for personal use property than for business use property"). Very few states impose a
tax on intangibles ("Most states impose a tax on intangibles") because it is easily avoided and
