South-Western Federal Taxation 2027: Essentials of Taxation, 30th Edition Test Bank – Annette Nellen

South-Western Federal Taxation 2027
Essentials of Taxation: Individuals and Business Entities
30th Edition
Annette Nellen, Andrew D. Cuccia, Mark Persellin, James C. Young


TEST BANK
✓ 2,517 Exam-Quality Questions

✓ 899 Multiple Choice Questions (MCQs)

✓ 1,026 True/False Questions

✓ 293 Short Answer Questions

✓ 244 Essay Questions

✓ 37 Completion Questions

✓ 18 Matching Questions

✓ Answer Key Included

✓ Complete Chapter-by-Chapter

Coverage ✓ Covers All Chapters (1–20)

✓ Updated for the 2027 Edition

,Ch01: Introduction to Taxation
True / False

1. The Medicare component of the FICA tax (1.45% on wages) is progressive because the tax due increases as wages
increase.
a. True
b. False
ANSWER: False
RATIONALE: The Medicare component is proportional because the rate is constant regardless of the wages
earned. There is no cap on the application of the 1.45 percent Medicare tax.
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: EOTX.SWFT.2027.LO: 1-02 - LO: 1-02
NATIONAL STANDARDS: United States - BUSPROG: Comprehension -
BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA: FN-Measurement
KEYWORDS: Bloom's: Understand
OTHER: Time: 2 min.
DATE CREATED: 4/22/2026 12:29 PM
DATE MODIFIED: 4/27/2026 12:54 PM

2. The Federal estate and gift taxes are examples of progressive rate taxes.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: EOTX.SWFT.2027.LO: 1-02 - LO: 1-02
NATIONAL STANDARDS: United States - BUSPROG: Comprehension -
BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA: FN-Measurement
KEYWORDS: Bloom's: Understand
OTHER: Time: 2 min.
DATE CREATED: 4/22/2026 12:29 PM
DATE MODIFIED: 4/27/2026 12:54 PM

3. The Federal excise tax on gasoline has a proportional effect on all taxpayers (that is, neither progressive nor
regressive).
a. True
b. False
ANSWER: False
RATIONALE: Most excise taxes are regressive as lower-income taxpayers commit more of their income to
Page 1

,Ch01: Introduction to Taxation
them than higher-income taxpayers.
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: EOTX.SWFT.2027.LO: 1-02 - LO: 1-02
NATIONAL STANDARDS: United States - BUSPROG: Comprehension -
BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA: FN-Measurement
KEYWORDS: Bloom's: Understand
OTHER: Time: 2 min.
DATE CREATED: 4/22/2026 12:29 PM
DATE MODIFIED: 4/27/2026 12:54 PM

4. Currently, the Federal corporate income tax is less progressive than the individual income tax.
a. True
b. False
ANSWER: True
RATIONALE: Currently, the Federal corporate income tax has a flat rate of 21%; the individual income tax
has a progressive rate structure from 10% to 37%.

POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: EOTX.SWFT.2027.LO: 1-02 - LO: 1-02
NATIONAL STANDARDS: United States - BUSPROG: Comprehension -
BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA: FN-Measurement
KEYWORDS: Bloom's: Understand
OTHER: Time: 2 min.
DATE CREATED: 4/22/2026 12:29 PM
DATE MODIFIED: 4/27/2026 12:54 PM

5. Mona inherits her mother’s personal residence, which she converts to a furnished rental house. These changes should
affect the amount of ad valorem property taxes levied on the properties.
a. True
b. False
ANSWER: True
RATIONALE: Conversion from residential to rental use will increase the taxes. Furthermore, Mona’s
mother may have had a senior citizen exemption on the property, which will no longer be
appropriate. Lastly, the furnishings in the rental house could now be subject to an ad valorem
tax on personalty.
POINTS: 1
DIFFICULTY: Easy

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, Ch01: Introduction to Taxation
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: EOTX.SWFT.2027.LO: 1-05 - LO: 1-05
NATIONAL STANDARDS: United States - BUSPROG: Comprehension -
BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA: FN-Measurement
KEYWORDS: Bloom's: Understand
OTHER: Time: 2 min.
DATE CREATED: 4/22/2026 12:29 PM
DATE MODIFIED: 4/27/2026 12:54 PM

6. A fixture will be subject to the ad valorem tax on personalty rather than the ad valorem tax on realty.
a. True
b. False
ANSWER: False
RATIONALE: By definition, a fixture becomes part of the real estate to which it is attached.
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: EOTX.SWFT.2027.LO: 1-05 - LO: 1-05
NATIONAL STANDARDS: United States - BUSPROG: Comprehension -
BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA: FN-Measurement
KEYWORDS: Bloom's: Understand
OTHER: Time: 2 min.
DATE CREATED: 4/22/2026 12:29 PM
DATE MODIFIED: 4/27/2026 12:54 PM

7. Even if property tax rates are not changed, the amount of ad valorem taxes imposed on realty may not remain the same.
a. True
b. False
ANSWER: True
RATIONALE: Property taxes will vary in accordance with changes in the assessed value of the property.
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: EOTX.SWFT.2027.LO: 1-05 - LO: 1-05
NATIONAL STANDARDS: United States - BUSPROG: Comprehension -
BUSPROG: Comprehension
STATE STANDARDS: United States - AK - AICPA: FN-Measurement
KEYWORDS: Bloom's: Understand
OTHER: Time: 2 min.
Page 3