Test Bank for South-Western Federal Taxation Individual Income Taxes 48th Edition

TEST BANK h




South-Western Federal Taxation: h h




Individual Income Taxes, 48th Edition h h h h




by James Young Complete Chapters 1 - 20
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TABLE OF CONTENTS
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Chapter 1: An Introduction to Taxation and Understanding the Federal Tax Law
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Chapter 2: Working with the Tax Law
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Chapter 03: Tax Formula and Tax Determination
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Chapter 04: Gross Income: Concepts and Inclusions
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Chapter 05: Gross Income: Exclusions
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Chapter 06: Deductions and Losses: In General
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Chapter 07: Deductions and Losses: Certain Business Expenses
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Chapter 08: Depreciation, Cost Recovery, Amortization, and Depletion
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Chapter 09: Deductions: Employee and Self-Employed-Related Expense
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Chapter 10: Deductions and Losses: Certain Itemized Deductions
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Chapter 11: Investor Losses
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Chapter 12: Alternative Minimum Tax
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Chapter 13: Tax Credits and Payment Procedures
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Chapter 14: Property Transactions: Determination of Gain or Loss and
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Chapter 15: Property Transactions: Nontaxable Exchanges
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Chapter 16: Property Transactions: Capital Gains and Losses
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,Chapter 17: Property Transactions: 1231 and Recapture Provisions
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Chapter 18: Accounting Periods and Methods
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Chapter 19: Deferred Compensation
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Chapter 20: Corporations and Partnerships
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, Chapterh 01h 2025h Individuals

Answershaththehendhofheachhchapter

Indicateh whetherh theh statementh ish trueh orh false.
1. hSaleshmadehoverhthehinternetharehnothexempthfromhthehapplicationhofhahgeneralhsalesh(orhuse)htax.

a. True
b. False

h h 2.hUponhaudithbyhthehIRS,hFaithhishassessedhahdeficiencyhofh$40,000hofhwhichh$25,000hishattributablehtohnegligence.
Theh20%hnegligencehpenaltyhwillhapplyhtoh$25,000.
a. True
b. False

h h 3.hUltimately,hmosthtaxesharehpaidhbyhindividuals.
a. True
b. False

h h 4.hEvenhifhpropertyhtaxhratesharehnothchanged,hthehamounthofh adh valoremhtaxeshimposedhonhrealtyhmayhnothremainhthehsame.
a. True
b. False

h h 5.hThehprincipalhobjectivehofhthehFUTAhtaxhishtohprovidehsomehmeasurehofhretirementhsecurity.
a. True
b. False
h

h 6.hIfhmorehIRShauditsharehproducinghahhigherhnumberhofhnohchangehresults,hthishindicateshincreasedhcompliancehonhtheh

parthofhtaxpayers.
a. True
b. False
h

h7.h Ahsafehandheasyhwayh forhahtaxpayerhtohavoidhlocalhandhstatehsalesh taxeshishtohmakehthehpurchasehinhahstateh thathlev
ieshnohsuchhtaxes.
a. True
b. False
h

h 8.hAhcalendarhyearhtaxpayerhfileshhish2023hFederalhincomehtaxhreturnhonhMarchh4,h2024.hThehreturnhreflectshanhoverpay

menthofh$6,000,handhthehtaxpayerhrequestshahrefundhofhthishamount.hThehrefundhishpaidhonhMayh16,h2024.hThehrefundhneedhnoth
includehinterest.
a. True
b. False

h h 9.h AhtaxhcuthenactedhbyhCongresshthathcontainshah sunseth provisionhwillhmakehthehtaxhcuthtemporary.
a. True
b. False



Pageh3

, Name: Class: Date:h

Chapterh 01h 2025h Individuals

h h 10.hForhFederalhincomehtaxhpurposes,htherehneverhhashbeenhahgeneralhamnestyhperiod.
a. True
b. False
h

h 11.hTohlessenhorheliminatehtheheffecthofhmultiplehtaxation,hahtaxpayerhwhohishsubjecthtohbothhforeignhandhU.S.hincomehtaxe

shonhthehsamehincomehishallowedheitherhahdeductionhorhahcredithforhthehforeignhtaxhpaid.
a. True
b. False
h

h 12.hBecausehithishconsistenthwithhthehwherewithalhtohpayhconcept,hthehtaxhlawhrequireshahsellerhtohrecognizehahgainhinhtheh

yearhthehinstallmenthsalehoccurs.
a. True
b. False

h h 13.hThehamounthofhahtaxpayer’shitemizedhdeductionshwillhincreasehthehchancehofhbeinghauditedhbyhthehIRS.
a. True
b. False
h

h 14.hInh2024,hJosé,hahwidower,hsellshlandh(fairhmarkethvaluehofh$100,000)htohhishdaughter,hLinda,hforh$50,000.hJoséhhashnoth

madehahtaxablehgift.
a. True
b. False
h

h 15.hForhomissionshfromhgrosshincomehinhexcesshofh25%hofhthathreported,htherehishnohstatutehofhlimitationshonhad
ditionalhincomehtaxhassessmentshbyhthehIRS.
a. True
b. False

h h 16.hStealthhtaxeshhavehtheheffecthofhgeneratinghadditionalhtaxeshfromhallhtaxpayers.
a. True
b. False
h

h 17.hJason’shbusinesshwarehousehishdestroyedhbyhfire.hBecausehthehinsurancehproceedshexceedhthehbasishofhthehpropert

y,hahgainhresults.hIfhJasonhshortlyhreinvestshthehproceedshinhahnewhwarehouse,hnohgainhishrecognizedhduehtohthehapplicationhofht
hehwherewithalhtohpayhconcept.
a. True
b. False

h h 18.hAnhinheritancehtaxhishahtaxhonhahdecedent’shrighthtohpasshpropertyhathdeath.
a. True
b. False

h h 19.hWhenhinteresthishchargedhonhahdeficiency,hanyhparthofhahmonthhcountshashahfullhmonth.
a. True
b. False
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