Advanced Tax Final Examination and
Already Passed Answers (2025-2026)
Edition.
An individual has taxable income of S60,000. The first $20,000 is taxed at 20%, the next $20,000
at 20%, and all income above $40,000 is taxed at 20%. Which tax structure is being applied to
the individual's taxable income? - Answer Proportional
Which federal income tax structure imposes an increasing marginal tax rate as the tax base
increases? - Answer Progressive tax
Which tax rate informs taxpayers the amount of tax they will pay when earning the next dollar?
- Answer Marginal
What describes a gift tax? - Answer Tax on the fair market value of property transfers
Which provision is an encouragement to improve social conditions? - Answer Accident and
health insurance
Taxpayer A and Taxpayer Bare both single and live in the same state. Taxpayer A has income of
$60,000, and Taxpayer B has income of $40,000. They each pay $3,000 in sales tax during the
year. This represents 5% of Taxpayer A's income and 7.5% of Taxpayer B's income. The state
considers equality through its tax structure. Which type of tax structure is represented? -
Answer Regressive
Which type of goal is achieved when tax law provides incentives for installing solar energy
systems? - Answer Economic
Which entity is usually treated as a partnership? - Answer LLC
An Eleventh Circuit client who files in the U.S. Court of Federal Claims wants to know whether to
include the terms of multiple options to renew a sale-leaseback to calculate a deduction. What
is the authoritative reference? - Answer A US. Court of Federal Claims case which analyzed
sale-leaseback transactions for operating equipment
, Which federal tax law is the only attempt to create consistency in the multistate income tax
process? - Answer Public Law 86-272
What is a primary source of tax law? - Answer U.S. Constitution
Which court's decision has no precedential value? - Answer The U.S. Tax Court Small Cases
Division
Which court allows a jury trial? - Answer The U.S. District Court
What is the difference between realized gain and recognized gain? - Answer The amount
reported on a tax return
Which term indicates the difference between the amount from sale or disposition of an asset
and the adjusted basis? - Answer the amount Realized gain (loss)
How is basis determined when converting property from personal to business use? - Answer
The lower of its adjusted basis or fair market value at the date of conversion
What is considered a capital asset? - Answer A computer used by a taxpayer for personal use
An investor purchased 100 shares of Corporation Y stock on January 1, 2013 for $1,000. On
January 1, 2014 the investor sells 25 shares of Corporation Y stock for $200. How should the
sale of shares on January 1, 2014 be classified? - Answer Short-term capital loss
A non-corporate taxpayer has two transactions involving the sale of capital assets during the
year. As a result of the transactions, he has a short-term capital gain of $2,000 and a long-term
capital loss of $6,000 A corporate taxpayer has the identical transactions occur during the year.
Which amounts will be added or deducted from ordinary income for the non-corporate and
corporate taxpayer capital gains, respectively? - Answer $3,000 deduction, no deduction or
addition
What is the excluded gain for qualified small business stock acquired after September 27, 2010?
- Answer 100%
Already Passed Answers (2025-2026)
Edition.
An individual has taxable income of S60,000. The first $20,000 is taxed at 20%, the next $20,000
at 20%, and all income above $40,000 is taxed at 20%. Which tax structure is being applied to
the individual's taxable income? - Answer Proportional
Which federal income tax structure imposes an increasing marginal tax rate as the tax base
increases? - Answer Progressive tax
Which tax rate informs taxpayers the amount of tax they will pay when earning the next dollar?
- Answer Marginal
What describes a gift tax? - Answer Tax on the fair market value of property transfers
Which provision is an encouragement to improve social conditions? - Answer Accident and
health insurance
Taxpayer A and Taxpayer Bare both single and live in the same state. Taxpayer A has income of
$60,000, and Taxpayer B has income of $40,000. They each pay $3,000 in sales tax during the
year. This represents 5% of Taxpayer A's income and 7.5% of Taxpayer B's income. The state
considers equality through its tax structure. Which type of tax structure is represented? -
Answer Regressive
Which type of goal is achieved when tax law provides incentives for installing solar energy
systems? - Answer Economic
Which entity is usually treated as a partnership? - Answer LLC
An Eleventh Circuit client who files in the U.S. Court of Federal Claims wants to know whether to
include the terms of multiple options to renew a sale-leaseback to calculate a deduction. What
is the authoritative reference? - Answer A US. Court of Federal Claims case which analyzed
sale-leaseback transactions for operating equipment
, Which federal tax law is the only attempt to create consistency in the multistate income tax
process? - Answer Public Law 86-272
What is a primary source of tax law? - Answer U.S. Constitution
Which court's decision has no precedential value? - Answer The U.S. Tax Court Small Cases
Division
Which court allows a jury trial? - Answer The U.S. District Court
What is the difference between realized gain and recognized gain? - Answer The amount
reported on a tax return
Which term indicates the difference between the amount from sale or disposition of an asset
and the adjusted basis? - Answer the amount Realized gain (loss)
How is basis determined when converting property from personal to business use? - Answer
The lower of its adjusted basis or fair market value at the date of conversion
What is considered a capital asset? - Answer A computer used by a taxpayer for personal use
An investor purchased 100 shares of Corporation Y stock on January 1, 2013 for $1,000. On
January 1, 2014 the investor sells 25 shares of Corporation Y stock for $200. How should the
sale of shares on January 1, 2014 be classified? - Answer Short-term capital loss
A non-corporate taxpayer has two transactions involving the sale of capital assets during the
year. As a result of the transactions, he has a short-term capital gain of $2,000 and a long-term
capital loss of $6,000 A corporate taxpayer has the identical transactions occur during the year.
Which amounts will be added or deducted from ordinary income for the non-corporate and
corporate taxpayer capital gains, respectively? - Answer $3,000 deduction, no deduction or
addition
What is the excluded gain for qualified small business stock acquired after September 27, 2010?
- Answer 100%
