WGU C237 TAXATION 1 ACTUAL EXAM QUESTIONS AND
WELL VERIFIED ANSWERS| HIGH YIELD QUESTIONS
AND ANSWERS | EXPERT GUARANTEE PASS AND 100%
ACCURATE | FREQUENTLY MOST TESTED QUESTIONS |
LATEST EXAM AND NEWEST VERSION!!!!
Describe the history of taxation in the US
CORRECT ANSWER:
unconstitutional 1895
Sources of Tax Law-Legislative Branch
CORRECT ANSWER:
- Internal Revenue Code (Top)
- Congressional Committee Reports
Describe the criteria of an equitable tax structure Equity
CORRECT ANSWER:
Is it Fair
Simplicity
CORRECT ANSWER:
understandability
Economy
CORRECT ANSWER:
minimal compliance and administrative costs
-
Convenience
,CORRECT ANSWER:
no burden of records and compliance
Certainty
CORRECT ANSWER:
Stability and certainty of amount of taxes
Regressive
CORRECT ANSWER:
decreases as tax base increases
Proportional
CORRECT ANSWER:
flat tax
Progressive
CORRECT ANSWER:
tax increases as tax base increases
Gross Income
CORRECT ANSWER:
Total income - Exclusions
Taxable income
CORRECT ANSWER:
Gross income-Deductions-Exemptions
Income before tax credits
CORRECT ANSWER:
Taxable income x tax rate
Total tax liability
CORRECT ANSWER:
Income before tax credits-tax credits
balance due or refund
,CORRECT ANSWER:
total tax liability - Prepayments
Distinguish between various types of taxes
CORRECT ANSWER:
State Tax
Local Income
Franchise Tax
Wealth transfer tax
Gift tax
Federal Estate tax
Property tax
Federal excise tax - customs
Sales Tax
Describe the administrative procedures of the IRS
CORRECT ANSWER:
Enforcement procedures - verify accuracy and audit
Statute of limitations - 3 years; up to 6 years if off by 25%; no limit for civil fraud
Describe various components of a tax practice
CORRECT ANSWER:
Tax Compliance and Procedure
Tax Research
Tax Planning and Consulting
Financial planning
Define each component of the individual income tax formula
CORRECT ANSWER:
Income
Exclusion - any nontaxable income
Deductions - for AGI - expenses connected with business; from AGI - personal
expenses
Adjusted Gross Income
Itemized Deductions and Standard Deductions
Personal exemption
Taxable Income
, Tax Rates and Gross Tax
Credit and prepayments - some credits are refundable
Identify three conditions that must be met for income to be taxable
CORRECT ANSWER:
Economic benefit
Realization of Income
Recognition of Income
Identify the primary accounting methods for individual tax purposes
CORRECT ANSWER:
cash receipts and disbursements method
accrual method
hybrid method
Define gross income in accordance with IRC Sec 61a
CORRECT ANSWER:
all income from whatever source derived, including (but not limited to) the listed
items of income. or income reduced by exclusions
Explain tax planning strategies individuals can use to minimize their tax liabilities
CORRECT ANSWER:
Shifting Income
Maximizing Itemized Deductions
MFJ vs MJS
Splitting Income
Identify terms that the IRS does not define as income
CORRECT ANSWER:
Unrealized Income
Self-Help Income
Rented value use of personal property
Gross sale price of property
Identify various types of major statutory exclusions from gross income
CORRECT ANSWER:
WELL VERIFIED ANSWERS| HIGH YIELD QUESTIONS
AND ANSWERS | EXPERT GUARANTEE PASS AND 100%
ACCURATE | FREQUENTLY MOST TESTED QUESTIONS |
LATEST EXAM AND NEWEST VERSION!!!!
Describe the history of taxation in the US
CORRECT ANSWER:
unconstitutional 1895
Sources of Tax Law-Legislative Branch
CORRECT ANSWER:
- Internal Revenue Code (Top)
- Congressional Committee Reports
Describe the criteria of an equitable tax structure Equity
CORRECT ANSWER:
Is it Fair
Simplicity
CORRECT ANSWER:
understandability
Economy
CORRECT ANSWER:
minimal compliance and administrative costs
-
Convenience
,CORRECT ANSWER:
no burden of records and compliance
Certainty
CORRECT ANSWER:
Stability and certainty of amount of taxes
Regressive
CORRECT ANSWER:
decreases as tax base increases
Proportional
CORRECT ANSWER:
flat tax
Progressive
CORRECT ANSWER:
tax increases as tax base increases
Gross Income
CORRECT ANSWER:
Total income - Exclusions
Taxable income
CORRECT ANSWER:
Gross income-Deductions-Exemptions
Income before tax credits
CORRECT ANSWER:
Taxable income x tax rate
Total tax liability
CORRECT ANSWER:
Income before tax credits-tax credits
balance due or refund
,CORRECT ANSWER:
total tax liability - Prepayments
Distinguish between various types of taxes
CORRECT ANSWER:
State Tax
Local Income
Franchise Tax
Wealth transfer tax
Gift tax
Federal Estate tax
Property tax
Federal excise tax - customs
Sales Tax
Describe the administrative procedures of the IRS
CORRECT ANSWER:
Enforcement procedures - verify accuracy and audit
Statute of limitations - 3 years; up to 6 years if off by 25%; no limit for civil fraud
Describe various components of a tax practice
CORRECT ANSWER:
Tax Compliance and Procedure
Tax Research
Tax Planning and Consulting
Financial planning
Define each component of the individual income tax formula
CORRECT ANSWER:
Income
Exclusion - any nontaxable income
Deductions - for AGI - expenses connected with business; from AGI - personal
expenses
Adjusted Gross Income
Itemized Deductions and Standard Deductions
Personal exemption
Taxable Income
, Tax Rates and Gross Tax
Credit and prepayments - some credits are refundable
Identify three conditions that must be met for income to be taxable
CORRECT ANSWER:
Economic benefit
Realization of Income
Recognition of Income
Identify the primary accounting methods for individual tax purposes
CORRECT ANSWER:
cash receipts and disbursements method
accrual method
hybrid method
Define gross income in accordance with IRC Sec 61a
CORRECT ANSWER:
all income from whatever source derived, including (but not limited to) the listed
items of income. or income reduced by exclusions
Explain tax planning strategies individuals can use to minimize their tax liabilities
CORRECT ANSWER:
Shifting Income
Maximizing Itemized Deductions
MFJ vs MJS
Splitting Income
Identify terms that the IRS does not define as income
CORRECT ANSWER:
Unrealized Income
Self-Help Income
Rented value use of personal property
Gross sale price of property
Identify various types of major statutory exclusions from gross income
CORRECT ANSWER:
