Taxation of Individuals 2025 Edition Test Bank | 48th Edition – 2025 Individual Tax Law & Practice Q&A

TESTg BANKg FOR
g South-WesterngFederalgTaxationg2025:gIndividualgIncomegTaxesg48egYoung
Chapterg1-20

Chapterg 01g 2025gIndividuals
AnswersgIncluded
Indicateg whetherg theg statementg isg trueg org false
.
1.gSalesgmadegovergtheginternetgaregnotgexemptgfromgthegapplicationgofgaggeneralgsalesg(orguse)gtax.
a. True
b. False

2.gUpongauditgbygthegIRS,gFaithgisgassessedgagdeficiencygofg$40,000gofgwhichg$25,000gisgattributablegtognegligence.
Theg20%gnegligencegpenaltygwillgapplygtog$25,000.
a. True
b. False

3.gUltimately,gmostgtaxesgaregpaidgbygindividuals.
a. True
b. False

4.gEvengifgpropertygtaxgratesgaregnotgchanged,gthegamountgofgadgvaloremgtaxesgimposedgongrealtygmaygnotgrem
aingthegsame.
a. True
b. False

5.gThegprincipalgobjectivegofgthegFUTAgtaxgisgtogprovidegsomegmeasuregofgretirementgsecurity.
a. True
b. False

6.gIfgmoregIRSgauditsgaregproducinggaghighergnumbergofgnog changegresults,gthisgindicatesgincreasedgcompliance
gongthegpartgofgtaxpayers.

a. True
b. False

7.gAgsafegandgeasygwaygforgagtaxpayergtogavoidglocalgandgstategsalesgtaxesgisgtogmakegthegpurchasegingagstateg
thatgleviesgnogsuchgtaxes.
a. True
b. False

8.gAgcalendargyeargtaxpayergfilesghisg2023gFederalgincomegtaxgreturngongMarchg4,g2024.gThegreturngreflectsgan
goverpaymentgofg$6,000,gandgthegtaxpayergrequestsgagrefundgofgthisgamount.gThegrefundgisgpaidgongMayg16,g2

a.g True
b.gFalse

9.gAgtaxgcutgenactedgbygCongressgthatgcontainsgagsunsetg provisiongwillgmakegthegtaxgcutgtempora
ry.
a.g True
b.gFalse

, 024.gThegrefundgneedgnotgincludeginterest.




a.g True
b.gFalse

9.gAgtaxgcutgenactedgbygCongressgthatgcontainsgagsunsetg provisiongwillgmakegthegtaxgcutgtempora
ry.
a.g True
b.gFalse

, 10.gForgFederalgincomegtaxgpurposes,gtheregneverghasgbeengaggeneralgamnestygperiod.
a. True
b. False

11.gToglessengorgeliminategthegeffectgofgmultiplegtaxation,gagtaxpayergwhogisgsubjectgtogbothgforeigngandgU.S.ginco
megtaxesgongthegsamegincomegisgallowedgeithergagdeductiongorgagcreditgforgthegforeigngtaxgpaid.
a. True
b. False

12.gBecausegitgisgconsistentgwithgthegwherewithalgtogpaygconcept,gthegtaxglawgrequiresgagsellergtogrecognizegaggai
ngingthegyeargtheginstallmentgsalegoccurs.
a. True
b. False

13.gThegamountgofgagtaxpayer’sgitemizedgdeductionsgwillgincreasegthegchancegofgbeinggauditedgbygthegIRS.
a. True
b. False

14.gIng2024,gJosé,gagwidower,gsellsglandg(fairgmarketgvaluegofg$100,000)gtoghisgdaughter,gLinda,gforg$50,000.gJoség
hasgnotgmadegagtaxableggift.
a. True
b. False

15.gForgomissionsgfromggrossgincomegingexcessgofg25%gofgthatgreported,gtheregisgnogstatutegofglimitations
gongadditionalgincomegtaxgassessmentsgbygthegIRS.

a. True
b. False

16.gStealthgtaxesghavegthegeffectgofggeneratinggadditionalgtaxesgfromgallgtaxpayers.
a. True
b. False

17.gJason’sgbusinessgwarehousegisgdestroyedgbygfire.gBecausegtheginsurancegproceedsgexceedgthegbasisgofgthegpro
perty,gaggaingresults.gIfgJasongshortlygreinvestsgthegproceedsgingagnewgwarehouse,gnoggaingisgrecognizedgduegto
gthegapplicationgofgthegwherewithalgtogpaygconcept.

a. True
b. False

18.gAnginheritancegtaxgisgagtaxgongagdecedent’sgrightgtogpassgpropertygatgdeath.
a.g True
b.gFalse

19.gWhenginterestgisgchargedgongagdeficiency,ganygpartgofgagmonthgcountsgasgagfullgmon
th.
a.g True
b.gFalse

, Name: Class: Date:

Chapterg01g 2025gIndividuals

20.gThegmajoritygofgIRSgauditsgareghandledgbygcorrespondence.
a. True
b. False

21.gThegratificationgofgthegSixteenthgAmendmentgtogthegU.S.gConstitutiongwasgnecessarygtogvalidategthegFede
ralgincomegtaxgongcorporations.
a. True
b. False

22.gOnegofgthegmajorgreasonsgforgthegenactmentgofgthegFederalgestategtaxgwasgtogpreventglargegamountsgofgwe
althgfromgbeinggaccumulatedgwithingagfamilygunit.
a. True
b. False

23.gUndergstategamnestygprograms,gallgdelinquentgandgunpaidgincomegtaxesgaregforgiven.
a. True
b. False

24.gIngpreparinggangincomegtaxgreturn,gthegusegofgagclient’sgestimatesgisgnotgpermitted.
a. True
b. False

25.gThegFederalgestategandggiftgtaxesgaregexamplesgofgprogressiveg rateg taxes.
a. True
b. False

26.gDuringganygmonthgingwhichgbothgthegfailuregtogfilegpenaltygandgthegfailuregtogpaygpenaltygapply,gthegfailuregtog
filegpenaltygisgincreasedgbygthegamountgofgthegfailuregtogpaygpenalty.
a. True
b. False

27.gForgthegnegligencegpenaltygtogapply,gthegunderpaymentgmustgbegcausedgbygintentionalgdisregardgofgrulesga
ndgregulationsgwithoutgintentgtogdefraud.
a. True
b. False

28.gUndergClint’sgwill,gallgofghisgpropertygpassesgtogeithergthegLutherangChurchgorgtoghisgspouse.gNogFederalges
tategtaxgwillgbegduegongClint’sgdeath.
a. True
b. False

29.gForgstategincomegtaxgpurposes,gsomegstatesgallowgagcreditgforgdependentsgrathergthangagdeduction.
a. True
b. False




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