Test Bank South-Western Federal Taxation 2025: Corporations, Partnerships, Estates and Trusts 48th Edition by Nellen | All Chapters ( 1-20 ) With All Appendix || A+

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Test Bank South-Western Federal Taxation 2025: Corporations, Partnerships,
Estates and Trusts by Nellen | All Chapters ( 1-20 ) With All Appendix || A+

Chapter 01: Understanding and Working with the Federal Tax Law

True / False

1. Many states have balanced budgets because laws or constitutional amendments preclude
deficit spending.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: CPET.SWFT.2025.LO: 1-01 - LO: 1-01
NATIONAL STANDARDS: United States - BUSPROG: Comprehension - BUSPROG:
Comprehension
STATE STANDARDS: United States - TX - AICPA: FN-Measurement
United States - AK - AICPA: FN-Research
KEYWORDS: Bloom's: Remember
OTHER: Time: 2 min.
DATE CREATED: 1/31/2024 10:55 AM
DATE MODIFIED: 3/1/2024 1:43 PM

2. The U.S. Federal government has a provision in the Constitution that precludes deficit
spending.
a. True
b. False
ANSWER: False
RATIONALE: There is no such provision, and the national debt continues to grow.
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: CPET.SWFT.2025.LO: 1-01 - LO: 1-01
NATIONAL STANDARDS: United States - BUSPROG: Comprehension - BUSPROG:
Comprehension


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STATE STANDARDS: United States - AK - AICPA: FN-Measurement
KEYWORDS: Bloom's: Remember
OTHER: Time: 2 min.
DATE CREATED: 1/31/2024 10:55 AM
DATE MODIFIED: 3/1/2024 1:43 PM

3. Revenue-neutral tax laws reduce deficits.
a. True
b. False
ANSWER: False
RATIONALE: They do not reduce deficits but do not aggravate the problem.
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: CPET.SWFT.2025.LO: 1-01 - LO: 1-01
NATIONAL STANDARDS: United States - BUSPROG: Comprehension - BUSPROG:
Comprehension
STATE STANDARDS: United States - AK - AICPA: FN-Measurement
KEYWORDS: Bloom's: Remember
OTHER: Time: 2 min.
DATE CREATED: 1/31/2024 10:55 AM
DATE MODIFIED: 3/1/2024 1:43 PM

4. Longer class lives for depreciable property and the required use of the straight-line method of
depreciation would likely
dampen the tax incentive for purchasing capital assets.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: CPET.SWFT.2025.LO: 1-02 - LO: 1-02
NATIONAL STANDARDS: United States - BUSPROG: Comprehension - BUSPROG:
Comprehension
STATE STANDARDS: United States - TX - AICPA: FN-Reporting
United States - AK - AICPA: FN-Research



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KEYWORDS: Bloom's: Remember
OTHER: Time: 2 min.
DATE CREATED: 1/31/2024 10:55 AM
DATE MODIFIED: 3/1/2024 1:43 PM

5. The Internal Revenue Code is a compilation of Federal tax legislation that appears in Title 26
of the United States
Code.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: CPET.SWFT.2025.LO: 1-02 - LO: 1-02
NATIONAL STANDARDS: United States - BUSPROG: Comprehension - BUSPROG:
Comprehension
STATE STANDARDS: United States - AK - AICPA: FN-Research
United States - TX - FN-Reporting
KEYWORDS: Bloom's: Remember
OTHER: Time: 2 min.
DATE CREATED: 1/31/2024 10:55 AM
DATE MODIFIED: 3/1/2024 1:43 PM

6. The favorable treatment of research and development expenses (via amortization deductions
and tax credits) is one
means of controlling the economy.
a. True
b. False
ANSWER: False
RATIONALE: This favorable treatment encourages certain activities (e.g., fostering
technological
progress). It does not control the economy.
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: CPET.SWFT.2025.LO: 1-02 - LO: 1-02



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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: 1/31/2024 10:55 AM
DATE MODIFIED: 3/1/2024 1:43 PM

7. The encouragement of private-sector pension plans can be justified under the encouragement
of certain industries.
a. True
b. False
ANSWER: False
RATIONALE: Justified under social considerations and encouragement of certain activities (e.g.,
savings).
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: CPET.SWFT.2025.LO: 1-02 - LO: 1-02
NATIONAL STANDARDS: United States - BUSPROG: Comprehension - BUSPROG:
Comprehension
STATE STANDARDS: United States - TX - AICPA: FN-Measurement
United States - AK - AICPA: FN-Reporting
KEYWORDS: Bloom's: Understand
OTHER: Time: 2 min.
DATE CREATED: 1/31/2024 10:55 AM
DATE MODIFIED: 3/1/2024 1:43 PM

8. One Internal Revenue Code section enables shareholders in a small business corporation to
obtain an ordinary deduction for any loss recognized on a stock investment.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: CPET.SWFT.2025.LO: 1-02 - LO: 1-02



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