ACC 3072014 37th test bank
1. The ratification of the Sixteenth Amendment to the U.S. Constitution
was necessary to validate the Federal income tax on corporations.
a. True
*b. False
2. Before the Sixteenth Amendment to the Constitution was ratified, the
re was no valid Federal income tax on individuals.
a. True
*b. False
3. The first income tax on individuals (after the ratification of the S
ixteenth Amendment to the Constitution) levied tax rates from a low of
2% to a high of 6%.
*a. True
b. False
4. The Federal income tax on individuals generates more revenue than th
e Federal income tax on corporations.
*a. True
b. False
5. The pay-as-you-go feature of the Federal income tax on individuals c
onforms to Adam Smith’s canon of certainty.
a. True
*b. False
6. Because the law is complicated, most individual taxpayers are not ab
le to complete their Federal income tax returns without outside assista
nce.
*a. True
b. False
7. The FICA tax (Medicare component) on wages is progressive since the
tax due increases as wages increase.
a. True
*b. False
8. The Federal estate and gift taxes are examples of progressive taxes.
*a. True
, b. False
9. The Federal excise tax on cigarettes is an example of a proportional
tax.
*a. True
b. False
10. Currently, the Federal income tax is less progressive than it ever
has been in the past.
a. True
*b. False
11. Mona inherits her mother’s personal residence, which she converts t
o a furnished rent house. These changes should affect the amount of ad
valorem property taxes levied on the properties.
*a. True
b. False
12. A fixture will be subject to the ad valorem tax on personalty rathe
r than the ad valorem tax on realty.
a. True
*b. False
13. Even if property tax rates are not changed, the amount of ad valore
m taxes imposed on realty may not remain the same.
*a. True
b. False
14. The ad valorem tax on personal use personalty is more often avoided
by taxpayers than the ad valorem tax on business use personalty.
*a. True
b. False
15. A Federal excise tax is no longer imposed on admission to theaters.
*a. True
b. False
16. There is a Federal excise tax on hotel occupancy.
, a. True
*b. False
17. The Federal gas-guzzler tax applies only to automobiles manufacture
d overseas and imported into the U.S.
a. True
*b. False
18. Like the Federal counterpart, the amount of the state excise taxes
on gasoline varies from state to state.
a. True
*b. False
19. Not all of the states that impose a general sales tax also have a u
se tax.
a. True
*b. False
20. Sales made by mail order are not exempt from the application of a g
eneral sales (or use) tax.
*a. True
b. False
21. Two persons who live in the same state but in different counties ma
y not be subject to the same general sales tax rate.
*a. True
b. False
22. States impose either a state income tax or a general sales tax, but
not both types of taxes.
a. True
*b. False
23. A safe and easy way for a taxpayer to avoid local and state sales t
axes is to make the purchase in a state that levies no such taxes.
a. True
*b. False
, 24. On transfers by death, the Federal government relies on an estate t
ax, while states impose an estate tax, an inheritance tax, both taxes,
or neither tax.
*a. True
b. False
25. An inheritance tax is a tax on a decedent’s right to pass property
at death.
a. True
*b. False
26. One of the major reasons for the enactment of the Federal estate ta
x was to prevent large amounts of wealth from being accumulated within
the family unit.
*a. True
b. False
27. Under Clint’s will, all of his property passes to either the Luther
an Church or to his wife. No Federal estate tax will be due on Clint’s
death in 2013.
*a. True
b. False
28. Under the usual state inheritance tax, two heirs, a cousin and a so
n of the deceased, would not be taxed at the same rate.
*a. True
b. False
29. The annual exclusion, currently $14,000, is available for gift and
estate tax purposes.
a. True
*b. False
30. In 2012, José, a widower, sells land (fair market value of $100,00
0) to his daughter, Linda, for $50,000. José has made a taxable gift of
$50,000.
a. True
*b. False
1. The ratification of the Sixteenth Amendment to the U.S. Constitution
was necessary to validate the Federal income tax on corporations.
a. True
*b. False
2. Before the Sixteenth Amendment to the Constitution was ratified, the
re was no valid Federal income tax on individuals.
a. True
*b. False
3. The first income tax on individuals (after the ratification of the S
ixteenth Amendment to the Constitution) levied tax rates from a low of
2% to a high of 6%.
*a. True
b. False
4. The Federal income tax on individuals generates more revenue than th
e Federal income tax on corporations.
*a. True
b. False
5. The pay-as-you-go feature of the Federal income tax on individuals c
onforms to Adam Smith’s canon of certainty.
a. True
*b. False
6. Because the law is complicated, most individual taxpayers are not ab
le to complete their Federal income tax returns without outside assista
nce.
*a. True
b. False
7. The FICA tax (Medicare component) on wages is progressive since the
tax due increases as wages increase.
a. True
*b. False
8. The Federal estate and gift taxes are examples of progressive taxes.
*a. True
, b. False
9. The Federal excise tax on cigarettes is an example of a proportional
tax.
*a. True
b. False
10. Currently, the Federal income tax is less progressive than it ever
has been in the past.
a. True
*b. False
11. Mona inherits her mother’s personal residence, which she converts t
o a furnished rent house. These changes should affect the amount of ad
valorem property taxes levied on the properties.
*a. True
b. False
12. A fixture will be subject to the ad valorem tax on personalty rathe
r than the ad valorem tax on realty.
a. True
*b. False
13. Even if property tax rates are not changed, the amount of ad valore
m taxes imposed on realty may not remain the same.
*a. True
b. False
14. The ad valorem tax on personal use personalty is more often avoided
by taxpayers than the ad valorem tax on business use personalty.
*a. True
b. False
15. A Federal excise tax is no longer imposed on admission to theaters.
*a. True
b. False
16. There is a Federal excise tax on hotel occupancy.
, a. True
*b. False
17. The Federal gas-guzzler tax applies only to automobiles manufacture
d overseas and imported into the U.S.
a. True
*b. False
18. Like the Federal counterpart, the amount of the state excise taxes
on gasoline varies from state to state.
a. True
*b. False
19. Not all of the states that impose a general sales tax also have a u
se tax.
a. True
*b. False
20. Sales made by mail order are not exempt from the application of a g
eneral sales (or use) tax.
*a. True
b. False
21. Two persons who live in the same state but in different counties ma
y not be subject to the same general sales tax rate.
*a. True
b. False
22. States impose either a state income tax or a general sales tax, but
not both types of taxes.
a. True
*b. False
23. A safe and easy way for a taxpayer to avoid local and state sales t
axes is to make the purchase in a state that levies no such taxes.
a. True
*b. False
, 24. On transfers by death, the Federal government relies on an estate t
ax, while states impose an estate tax, an inheritance tax, both taxes,
or neither tax.
*a. True
b. False
25. An inheritance tax is a tax on a decedent’s right to pass property
at death.
a. True
*b. False
26. One of the major reasons for the enactment of the Federal estate ta
x was to prevent large amounts of wealth from being accumulated within
the family unit.
*a. True
b. False
27. Under Clint’s will, all of his property passes to either the Luther
an Church or to his wife. No Federal estate tax will be due on Clint’s
death in 2013.
*a. True
b. False
28. Under the usual state inheritance tax, two heirs, a cousin and a so
n of the deceased, would not be taxed at the same rate.
*a. True
b. False
29. The annual exclusion, currently $14,000, is available for gift and
estate tax purposes.
a. True
*b. False
30. In 2012, José, a widower, sells land (fair market value of $100,00
0) to his daughter, Linda, for $50,000. José has made a taxable gift of
$50,000.
a. True
*b. False
