TEST BANK
h
South-Western Federal Taxation 2025: Comprehensive,
h h h h h
48th Edition by Young Complete 30 Chapters
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TEST BANK h
Page 1
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,TABLE OF CONTENTS h h h
Chapter 1: An Introduction to Taxation and Understanding the Federal Tax Law
h h h h h h h h h h h h
Chapter 2: Working with the Tax Law
h h h h h h h
Chapter 3: Tax Formula and Tax Determination
h h h h h h h
Chapter 4: Gross Income: Concepts and Inclusions
h h h h h h h
Chapter 5: Gross Income: Exclusions
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Chapter 6: Deductions and Losses: In General 7-1 Bad Debts
h h h h h h h h h h
Chapter 8: Depreciation, Cost Recovery, Amortization, and Depletion
h h h h h h h h
Chapter 9: Deductions: Employee and Self-Employed-Related Expenses
h h h h h h h
Chapter 10: Deductions and Losses: Certain Itemized Deductions
h h h h h h h h
Chapter 11: Investor Losses
h h h h
Chapter 12: Tax Credits and Payments
h h h h h h
Chapter 13: Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxab
h h h h h h h h h h h h h
Chapter 14: Property Transactions: Capital Gains and Losses, § 1231, and Recapture Provisions
h h h h h h h h h h h h h
Chapter 15: The Deduction for Qualified Business Income for Noncorporate Taxpayers
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Chapter 16: Accounting Periods and Methods
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Chapter 17: Corporations: Introduction and Operating Rules
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Chapter 18: Corporations: Organization and Capital Structure
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Chapter 19: Corporations: Distributions Not in Complete Liquidation
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Chapter 20: Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations
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Chapter 21: Partnerships: Formation, Operation, and Basis
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Chapter 22: Partnerships: Distributions, Transfer of Interests, and Terminations
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Chapter 23: S Corporations
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Chapter 24: Taxes in the Financial Statements
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Chapter 25: Exempt Entities
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Chapter 26: Multistate Corporate Taxation
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Chapter 27: Taxation of International Transactions
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Chapter 28: Tax Practice and Ethics
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Chapter 29: The Federal Gift and Estate Taxes
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Chapter 30: Income Taxation of Trusts and Estates
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Page 2
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,Chapter 01 2025 - Comprehensive
h h h h
Answers are at the end of h h h h h
each chapter
h h
Indicate whether the statement is true or false.
h h h h h h h
h 1. If more IRS audits are producing a higher number of no change results, this indicates increased compliance on the
h h h h h h h h h h h h h h h h h h h
part of taxpayers.
h h h
True
False
h 2. The first income tax on individuals (after the ratification of the Sixteenth Amendment to the Constitution) levied tax rates
h h h h h h h h h h h h h h h h h h h
from a low of 1% to a high of 6%.
h h h h h h h h h h
True
False
h 3. Stealth taxes have the effect of generating additional taxes from all taxpayers.
h h h h h h h h h h h h
True
False
h 4. If fraud is involved, there is no time limit on the assessment of a deficiency by the IRS.
h h h h h h h h h h h h h h h h h h
True
False
h 5. Under state amnesty programs, all delinquent and unpaid income taxes are forgiven.
h h h h h h h h h h h h
True
False
h 6. The Federal estate and gift taxes are examples of progressive rate taxes.
h h h h h h h h h h h h
True
False
h 7. The IRS is required to redetermine the interest rate on underpayments and overpayments once a year.
h h h h h h h h h h h h h h h h
True
False
h 8. The Federal income tax on individuals generates more revenue than the Federal income tax on corporations.
h h h h h h h h h h h h h h h h
True
False
h 9. To mitigate the effect of the annual accounting period concept, the tax law permits the carryforward of excess
h h h h h h h h h h h h h h h h h h
charitable contributions of a particular year to other years.
h h h h h h h h h
True
False
h 10. Unlike FICA, FUTA requires that employers comply with state as well as Federal rules.
h h h h h h h h h h h h h h
True
False
Page 3
h
, Name: Class: Date:
Chapter 01 2025 - Comprehensive
h h h h
h 11. If a special agent becomes involved in the audit of a return, this indicates that the IRS suspects that fraud is
h h h h h h h h h h h h h h h h h h h h h
involved.
h
True
False
h 12. Two persons who live in the same state but in different counties may not be subject to the same general sales tax
h h h h h h h h h h h h h h h h h h h h h h
rate. h
True
False
h 13. Under the usual state inheritance tax, two heirs, a cousin and a son of the deceased, would not be taxed at the
h h h h h h h h h h h h h h h h h h h h h h
same rate.
h h
True
False
h 14. Various tax provisions encourage the creation of certain types of retirement plans. Such provisions can be
h h h h h h h h h h h h h h h h
justified on both economic and social grounds.
h h h h h h h
True
False
h 15. A parent employs her twin daughters, age 17, in her sole proprietorship. The daughters are not subject to FICA
h h h h h h h h h h h h h h h h h h h
coverage.
h
True
False
h 16. For omissions from gross income in excess of 25% of that reported, there is no statute of limitations on
h h h h h h h h h h h h h h h h h h h
additional income tax assessments by the IRS.
h h h h h h h
True
False
h 17. Not all of the states that impose a general sales tax also have a use tax.
h h h h h h h h h h h h h h h h
True
False
h 18. States impose either a state income tax or a general sales tax, but not both types of taxes.
h h h h h h h h h h h h h h h h h h
True
False
h 19. The amount of the state excise taxes on gasoline varies from state to state.
h h h h h h h h h h h h h h
True
False
h 20. Upon audit by the IRS, Faith is assessed a deficiency of $40,000 of which $25,000 is attributable to negligence.
h h h h h h h h h h h h h h h h h h h
The 20% negligence penalty will apply to $25,000.
h h h h h h h
True
False
Page 4
h
h
South-Western Federal Taxation 2025: Comprehensive,
h h h h h
48th Edition by Young Complete 30 Chapters
h h h h h h
TEST BANK h
Page 1
h
,TABLE OF CONTENTS h h h
Chapter 1: An Introduction to Taxation and Understanding the Federal Tax Law
h h h h h h h h h h h h
Chapter 2: Working with the Tax Law
h h h h h h h
Chapter 3: Tax Formula and Tax Determination
h h h h h h h
Chapter 4: Gross Income: Concepts and Inclusions
h h h h h h h
Chapter 5: Gross Income: Exclusions
h h h h h
Chapter 6: Deductions and Losses: In General 7-1 Bad Debts
h h h h h h h h h h
Chapter 8: Depreciation, Cost Recovery, Amortization, and Depletion
h h h h h h h h
Chapter 9: Deductions: Employee and Self-Employed-Related Expenses
h h h h h h h
Chapter 10: Deductions and Losses: Certain Itemized Deductions
h h h h h h h h
Chapter 11: Investor Losses
h h h h
Chapter 12: Tax Credits and Payments
h h h h h h
Chapter 13: Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxab
h h h h h h h h h h h h h
Chapter 14: Property Transactions: Capital Gains and Losses, § 1231, and Recapture Provisions
h h h h h h h h h h h h h
Chapter 15: The Deduction for Qualified Business Income for Noncorporate Taxpayers
h h h h h h h h h h h
Chapter 16: Accounting Periods and Methods
h h h h h h
Chapter 17: Corporations: Introduction and Operating Rules
h h h h h h h
Chapter 18: Corporations: Organization and Capital Structure
h h h h h h h
Chapter 19: Corporations: Distributions Not in Complete Liquidation
h h h h h h h h
Chapter 20: Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations
h h h h h h h h h h h h
Chapter 21: Partnerships: Formation, Operation, and Basis
h h h h h h h
Chapter 22: Partnerships: Distributions, Transfer of Interests, and Terminations
h h h h h h h h h
Chapter 23: S Corporations
h h h h
Chapter 24: Taxes in the Financial Statements
h h h h h h h
Chapter 25: Exempt Entities
h h h h
Chapter 26: Multistate Corporate Taxation
h h h h h
Chapter 27: Taxation of International Transactions
h h h h h h
Chapter 28: Tax Practice and Ethics
h h h h h h
Chapter 29: The Federal Gift and Estate Taxes
h h h h h h h h
Chapter 30: Income Taxation of Trusts and Estates
h h h h h h h
Page 2
h
,Chapter 01 2025 - Comprehensive
h h h h
Answers are at the end of h h h h h
each chapter
h h
Indicate whether the statement is true or false.
h h h h h h h
h 1. If more IRS audits are producing a higher number of no change results, this indicates increased compliance on the
h h h h h h h h h h h h h h h h h h h
part of taxpayers.
h h h
True
False
h 2. The first income tax on individuals (after the ratification of the Sixteenth Amendment to the Constitution) levied tax rates
h h h h h h h h h h h h h h h h h h h
from a low of 1% to a high of 6%.
h h h h h h h h h h
True
False
h 3. Stealth taxes have the effect of generating additional taxes from all taxpayers.
h h h h h h h h h h h h
True
False
h 4. If fraud is involved, there is no time limit on the assessment of a deficiency by the IRS.
h h h h h h h h h h h h h h h h h h
True
False
h 5. Under state amnesty programs, all delinquent and unpaid income taxes are forgiven.
h h h h h h h h h h h h
True
False
h 6. The Federal estate and gift taxes are examples of progressive rate taxes.
h h h h h h h h h h h h
True
False
h 7. The IRS is required to redetermine the interest rate on underpayments and overpayments once a year.
h h h h h h h h h h h h h h h h
True
False
h 8. The Federal income tax on individuals generates more revenue than the Federal income tax on corporations.
h h h h h h h h h h h h h h h h
True
False
h 9. To mitigate the effect of the annual accounting period concept, the tax law permits the carryforward of excess
h h h h h h h h h h h h h h h h h h
charitable contributions of a particular year to other years.
h h h h h h h h h
True
False
h 10. Unlike FICA, FUTA requires that employers comply with state as well as Federal rules.
h h h h h h h h h h h h h h
True
False
Page 3
h
, Name: Class: Date:
Chapter 01 2025 - Comprehensive
h h h h
h 11. If a special agent becomes involved in the audit of a return, this indicates that the IRS suspects that fraud is
h h h h h h h h h h h h h h h h h h h h h
involved.
h
True
False
h 12. Two persons who live in the same state but in different counties may not be subject to the same general sales tax
h h h h h h h h h h h h h h h h h h h h h h
rate. h
True
False
h 13. Under the usual state inheritance tax, two heirs, a cousin and a son of the deceased, would not be taxed at the
h h h h h h h h h h h h h h h h h h h h h h
same rate.
h h
True
False
h 14. Various tax provisions encourage the creation of certain types of retirement plans. Such provisions can be
h h h h h h h h h h h h h h h h
justified on both economic and social grounds.
h h h h h h h
True
False
h 15. A parent employs her twin daughters, age 17, in her sole proprietorship. The daughters are not subject to FICA
h h h h h h h h h h h h h h h h h h h
coverage.
h
True
False
h 16. For omissions from gross income in excess of 25% of that reported, there is no statute of limitations on
h h h h h h h h h h h h h h h h h h h
additional income tax assessments by the IRS.
h h h h h h h
True
False
h 17. Not all of the states that impose a general sales tax also have a use tax.
h h h h h h h h h h h h h h h h
True
False
h 18. States impose either a state income tax or a general sales tax, but not both types of taxes.
h h h h h h h h h h h h h h h h h h
True
False
h 19. The amount of the state excise taxes on gasoline varies from state to state.
h h h h h h h h h h h h h h
True
False
h 20. Upon audit by the IRS, Faith is assessed a deficiency of $40,000 of which $25,000 is attributable to negligence.
h h h h h h h h h h h h h h h h h h h
The 20% negligence penalty will apply to $25,000.
h h h h h h h
True
False
Page 4
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