TEST BANK .
South-Western Federal Taxation 2025:
. . .
Individual Income Taxes, 48th Edition
. . . .
by James Young Complete Chapters 1 - 20
. . .. . . . .
Page 1
.
,TABLE OF CONTENTS
. . .
Chapter 1: An Introduction to Taxation and Understanding the Federal Tax Law
. . . . . . . . . . . .
Chapter 2: Working with the Tax Law
. . . . . . .
Chapter 03: Tax Formula and Tax Determination
. . . . . . .
Chapter 04: Gross Income: Concepts and Inclusions
. . . . . . .
Chapter 05: Gross Income: Exclusions
. . . . .
Chapter 06: Deductions and Losses: In General
. . . . . . .
Chapter 07: Deductions and Losses: Certain Business Expenses
. . . . . . . .
Chapter 08: Depreciation, Cost Recovery, Amortization, and Depletion
. . . . . . . .
Chapter 09: Deductions: Employee and Self-Employed-Related Expense
. . . . . . .
Chapter 10: Deductions and Losses: Certain Itemized Deductions
. . . . . . . .
Chapter 11: Investor Losses
. . . .
Chapter 12: Alternative Minimum Tax
. . . . .
Chapter 13: Tax Credits and Payment Procedures
. . . . . . .
Chapter 14: Property Transactions: Determination of Gain or Loss and
. . . . . . . . . .
Chapter 15: Property Transactions: Nontaxable Exchanges
. . . . . .
Chapter 16: Property Transactions: Capital Gains and Losses
. . . . . . . .
Chapter 17: Property Transactions: 1231 and Recapture Provisions
. . . . . . . .
Chapter 18: Accounting Periods and Methods
. . . . . .
Chapter 19: Deferred Compensation
. . . .
Chapter 20: Corporations and Partnerships
. . . .
Page 2
.
, Chapter 01 2025 Individuals
. . .
Answers at the end of each chapter
. . . . . .
Indicate whether the statement is true or false.
. . . . . . .
. . 1. Sales made over the internet are not exempt from the application of a general sales (or use) tax.
. . . . . . . . . . . . . . . . . .
a. True
b. False
. . 2. UponauditbytheIRS,Faithisassessedadeficiencyof$40,000ofwhich$25,000isattributabletonegligence.
. . . . . . . . . . . . . . . . . . .
The20%negligencepenaltywillapplyto$25,000.
. . . . . . .
a. True
b. False
. . 3. Ultimately,mosttaxesarepaidbyindividuals.
. . . . . . .
a. True
b. False
. . 4. Even if property tax rates are not changed, the amount of ad valorem taxes imposed on realty may not remainthe same.
. . . . . . . . . . . . . . . . . . . . . .
a. True
b. False
. . 5. TheprincipalobjectiveoftheFUTAtaxistoprovidesomemeasureofretirementsecurity.
. . . . . . . . . . . . . . .
a. True
b. False
. . 6. If more IRS audits are producing a higher number of no change results, this indicates increased compliance onthe part of
. . . . . . . . . . . . . . . . . . . . .
taxpayers.
.
a. True
b. False
. . 7. A safe and easy way for a taxpayer to avoid local and state sales taxes is to make the purchase in a state thatlevies no such
. . . . . . . . . . . . . . . . . . . . . . . . . . .
taxes. .
a. True
b. False
. . 8. A calendar year taxpayer files his 2023 Federal income tax return on March 4, 2024. The return reflects an overpayment of $6,000,
. . . . . . . . . . . . . . . . . . . . . .
and the taxpayer requests a refund of this amount. The refund is paid on May 16, 2024.The refund need not include interest.
. . . . . . . . . . . . . . . . . . . . . . .
a. True
b. False
. . 9. A tax cut enacted by Congress that contains a sunset provision will make the tax cut temporary.
. . . . . . . . . . . . . . . . .
a. True
b. False
Page 3
.
, Name: Class: Date: .
Chapter 01 2025 Individuals
. . .
. . 10. For Federal income tax purposes, there never has been a general amnesty period.
. . . . . . . . . . . . .
a. True
b. False
. . 11.Tolessenoreliminatetheeffectofmultipletaxation,ataxpayerwhoissubjecttobothforeignandU.S.income taxes on the same
. . . . . . . . . . . . . . . . . . . . . . . .
income is allowed either a deduction or a credit for the foreign tax paid.
. . . . . . . . . . . . . .
a. True
b. False
. . 12. Because it is consistent with the wherewithal to pay concept, the tax law requires a seller to recognize a gain inthe year the
. . . . . . . . . . . . . . . . . . . . . . . .
installment sale occurs.
. . .
a. True
b. False
. . 13. The amount of a taxpayer’s itemized deductions will increase the chance of being audited by the IRS.
. . . . . . . . . . . . . . . . .
a. True
b. False
. . 14.In2024,José,awidower,sellsland(fairmarketvalueof$100,000)tohisdaughter,Linda,for$50,000.Joséhas not made a taxable gift.
. . . . . . . . . . . . . . . . . . . . . . . . .
a. True
b. False
. . 15. Foromissionsfromgrossincomeinexcessof25%ofthatreported,thereisnostatuteoflimitationson additional income tax
. . . . . . . . . . . . . . . . . . . . . .
assessments by the IRS.
. . . .
a. True
b. False
. . 16. Stealth taxes have the effect of generating additional taxes from all taxpayers.
. . . . . . . . . . . .
a. True
b. False
. . 17. Jason’s business warehouse is destroyed by fire. Because the insurance proceeds exceed the basis of the property, a gain results.
. . . . . . . . . . . . . . . . . . . .
If Jasonshortly reinvests theproceeds in anew warehouse, no gain is recognized due to the application of the wherewithal to pay
. . . . . . . . . . . . . . . . . . . . . . .
concept..
a. True
b. False
. . 18. An inheritance tax is a tax on a decedent’s right to pass property at death.
. . . . . . . . . . . . . . .
a. True
b. False
. . 19. When interest is charged on a deficiency, any part of a month counts as a full month.
. . . . . . . . . . . . . . . . .
a. True
b. False
Page 4
.
South-Western Federal Taxation 2025:
. . .
Individual Income Taxes, 48th Edition
. . . .
by James Young Complete Chapters 1 - 20
. . .. . . . .
Page 1
.
,TABLE OF CONTENTS
. . .
Chapter 1: An Introduction to Taxation and Understanding the Federal Tax Law
. . . . . . . . . . . .
Chapter 2: Working with the Tax Law
. . . . . . .
Chapter 03: Tax Formula and Tax Determination
. . . . . . .
Chapter 04: Gross Income: Concepts and Inclusions
. . . . . . .
Chapter 05: Gross Income: Exclusions
. . . . .
Chapter 06: Deductions and Losses: In General
. . . . . . .
Chapter 07: Deductions and Losses: Certain Business Expenses
. . . . . . . .
Chapter 08: Depreciation, Cost Recovery, Amortization, and Depletion
. . . . . . . .
Chapter 09: Deductions: Employee and Self-Employed-Related Expense
. . . . . . .
Chapter 10: Deductions and Losses: Certain Itemized Deductions
. . . . . . . .
Chapter 11: Investor Losses
. . . .
Chapter 12: Alternative Minimum Tax
. . . . .
Chapter 13: Tax Credits and Payment Procedures
. . . . . . .
Chapter 14: Property Transactions: Determination of Gain or Loss and
. . . . . . . . . .
Chapter 15: Property Transactions: Nontaxable Exchanges
. . . . . .
Chapter 16: Property Transactions: Capital Gains and Losses
. . . . . . . .
Chapter 17: Property Transactions: 1231 and Recapture Provisions
. . . . . . . .
Chapter 18: Accounting Periods and Methods
. . . . . .
Chapter 19: Deferred Compensation
. . . .
Chapter 20: Corporations and Partnerships
. . . .
Page 2
.
, Chapter 01 2025 Individuals
. . .
Answers at the end of each chapter
. . . . . .
Indicate whether the statement is true or false.
. . . . . . .
. . 1. Sales made over the internet are not exempt from the application of a general sales (or use) tax.
. . . . . . . . . . . . . . . . . .
a. True
b. False
. . 2. UponauditbytheIRS,Faithisassessedadeficiencyof$40,000ofwhich$25,000isattributabletonegligence.
. . . . . . . . . . . . . . . . . . .
The20%negligencepenaltywillapplyto$25,000.
. . . . . . .
a. True
b. False
. . 3. Ultimately,mosttaxesarepaidbyindividuals.
. . . . . . .
a. True
b. False
. . 4. Even if property tax rates are not changed, the amount of ad valorem taxes imposed on realty may not remainthe same.
. . . . . . . . . . . . . . . . . . . . . .
a. True
b. False
. . 5. TheprincipalobjectiveoftheFUTAtaxistoprovidesomemeasureofretirementsecurity.
. . . . . . . . . . . . . . .
a. True
b. False
. . 6. If more IRS audits are producing a higher number of no change results, this indicates increased compliance onthe part of
. . . . . . . . . . . . . . . . . . . . .
taxpayers.
.
a. True
b. False
. . 7. A safe and easy way for a taxpayer to avoid local and state sales taxes is to make the purchase in a state thatlevies no such
. . . . . . . . . . . . . . . . . . . . . . . . . . .
taxes. .
a. True
b. False
. . 8. A calendar year taxpayer files his 2023 Federal income tax return on March 4, 2024. The return reflects an overpayment of $6,000,
. . . . . . . . . . . . . . . . . . . . . .
and the taxpayer requests a refund of this amount. The refund is paid on May 16, 2024.The refund need not include interest.
. . . . . . . . . . . . . . . . . . . . . . .
a. True
b. False
. . 9. A tax cut enacted by Congress that contains a sunset provision will make the tax cut temporary.
. . . . . . . . . . . . . . . . .
a. True
b. False
Page 3
.
, Name: Class: Date: .
Chapter 01 2025 Individuals
. . .
. . 10. For Federal income tax purposes, there never has been a general amnesty period.
. . . . . . . . . . . . .
a. True
b. False
. . 11.Tolessenoreliminatetheeffectofmultipletaxation,ataxpayerwhoissubjecttobothforeignandU.S.income taxes on the same
. . . . . . . . . . . . . . . . . . . . . . . .
income is allowed either a deduction or a credit for the foreign tax paid.
. . . . . . . . . . . . . .
a. True
b. False
. . 12. Because it is consistent with the wherewithal to pay concept, the tax law requires a seller to recognize a gain inthe year the
. . . . . . . . . . . . . . . . . . . . . . . .
installment sale occurs.
. . .
a. True
b. False
. . 13. The amount of a taxpayer’s itemized deductions will increase the chance of being audited by the IRS.
. . . . . . . . . . . . . . . . .
a. True
b. False
. . 14.In2024,José,awidower,sellsland(fairmarketvalueof$100,000)tohisdaughter,Linda,for$50,000.Joséhas not made a taxable gift.
. . . . . . . . . . . . . . . . . . . . . . . . .
a. True
b. False
. . 15. Foromissionsfromgrossincomeinexcessof25%ofthatreported,thereisnostatuteoflimitationson additional income tax
. . . . . . . . . . . . . . . . . . . . . .
assessments by the IRS.
. . . .
a. True
b. False
. . 16. Stealth taxes have the effect of generating additional taxes from all taxpayers.
. . . . . . . . . . . .
a. True
b. False
. . 17. Jason’s business warehouse is destroyed by fire. Because the insurance proceeds exceed the basis of the property, a gain results.
. . . . . . . . . . . . . . . . . . . .
If Jasonshortly reinvests theproceeds in anew warehouse, no gain is recognized due to the application of the wherewithal to pay
. . . . . . . . . . . . . . . . . . . . . . .
concept..
a. True
b. False
. . 18. An inheritance tax is a tax on a decedent’s right to pass property at death.
. . . . . . . . . . . . . . .
a. True
b. False
. . 19. When interest is charged on a deficiency, any part of a month counts as a full month.
. . . . . . . . . . . . . . . . .
a. True
b. False
Page 4
.
