test bank for South-Western Federal Taxation 2025 Individual Income Taxes, 48th Edition by James Young.

TEST BANKb




South-Western Federal Taxation 2025:
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Individual Income Taxes, 48th Edition by
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James Young Complete Chapters 1 - 20
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Pageb1

,TABLEOF CONTENTS b




Chapter 1: An Introduction to Taxation and Understanding the Federal Tax Law Chapter
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2: Working with the Tax Law
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Chapter 03: Tax Formula and Tax Determination Chapter
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04: Gross Income: Concepts and Inclusions Chapter 05:
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Gross Income: Exclusions
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Chapter 06: Deductions and Losses: In General
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Chapter 07: Deductions and Losses: Certain Business Expenses Chapter
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08: Depreciation, Cost Recovery, Amortization, and Depletion Chapter 09:
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Deductions: Employee and Self-Employed- b b b




Related Expense Chapter 10: Deductions and Losses: Certain Itemized De
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ductions Chapter 11: Investor Losses
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Chapter 12: Alternative Minimum Tax
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Chapter 13: Tax Credits and Payment Procedures
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Chapter 14: Property Transactions: Determination of Gain or Loss and Cha
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pter 15: Property Transactions: Nontaxable Exchanges
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Chapter 16: Property Transactions: Capital Gains and Losses Chapte
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r 17: Property Transactions: 1231 and Recapture Provisions Chapter
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18: Accounting Periods and Methods
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Chapter 19: Deferred Compensation Chapter
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20: Corporations and Partnerships
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Pageb2

, Chapterb01b20252bIndividuals

Answers2at2the2end2of2each2chapter

Indicatebwhetherbthebstatementbis2btrueborbfalse.
b1.bSalesbmadeboverbthebinternetbarebnot2exempt2frombthebapplicationbofbabgeneralbsalesb(orbuse)btax.
a. True
b. False

b2.bUponbauditbbybthebIRS,bFaithbisbassessedbabdeficiencybofb$40,000bofbwhichb$25,000bisbattributablebtobnegligence.
The220%bnegligencebpenaltybwillbapplybtob$25,000.
a. True
b. False

3.bUltimately,bmostbtaxesbarebpaidbbybindividuals.
b

a. True
b. False

b4.bEvenbifbpropertybtaxbratesbarebnot2changed,bthebamountbofbadbvalorem2taxesbimposedbonbrealtybmaybnotbremainthebsame.
a. True
b. False

b5.bThebprincipalbobjectivebofbthebFUTA2tax2isbtobprovidebsomebmeasurebofbretirementbsecurity.
a. True
b. False

6.bIfbmorebIRSbauditsbarebproducingbabhigherbnumberbofbnobchangebresults,bthisbindicatesbincreasedbcompliancebonthe2b
b

partbofbtaxpayers.
a. True
b. False

b7.bAbsafe2andbeasybwaybforbabtaxpayerbtobavoidblocalbandbstatebsalesbtaxesbisbtobmakebthebpurchasebinbabstate2thatlevbies

nobsuchbtaxes.
b

a. True
b. False

8.bA2calendarbyearbtaxpayerbfilesbhisb2023bFederalbincomebtaxbreturnbonbMarchb4,b2024.bThebreturnbreflects2anboverpaybm
b

ent2ofb$6,000,bandbthebtaxpayerbrequestsbabrefundbofbthisbamount.bThebrefundbisbpaidbonbMayb16,b2024.Thebrefundbneedbnot2b in
cludebinterest.
a. True
b. False

b9.bAbtax2cutbenactedbbybCongressbthatbcontainsbab sunsetbprovisionbwillbmake2thebtaxbcutbtemporary.
a. True
b. False



Pageb3

, Name: Class: Date:b

Chapterb01b2025bIndividuals

10.bForbFederalbincomebtax2purposes,btherebneverbhasbbeenbabgeneralbamnestybperiod.
b

a. True
b. False

b11.bToblessenborbeliminatebthebeffectbofbmultiplebtaxation,babtaxpayerbwho2isbsubject2tobbothbforeignbandbU.S.bincomebtaxeb

sbonbthe2samebincomebisballowedbeitherbabdeductionborbabcredit2forbthebforeignbtaxbpaid.
a. True
b. False

12.bBecausebit2isbconsistentbwithbthebwherewithalbtobpaybconcept,bthebtaxblawbrequiresbabsellerbtobrecognizebabgainbintheb
b

yearbthebinstallmentbsaleboccurs.
a. True
b. False

13.bThe2amountbofbabtaxpayer’s2itemizedbdeductionsbwillbincreasebthebchance2ofbbeingbauditedbbybthebIRS.
b


a. True
b. False

14.bInb2024,bJosé,babwidower,bsellsblandb(fairbmarketbvaluebofb$100,000)btobhisbdaughter,bLinda,bforb$50,000.bJosébhas2not2b
b

madebabtaxablebgift.
a. True
b. False

b15.bForbomissionsbfrombgrossbincomebinbexcessbofb25%bofbthat2reported,btherebisbno2statutebofblimitationsbonbadb

ditionalbincomebtaxbassessmentsbbybthebIRS.
a. True
b. False

16.bStealthbtaxesbhave2thebeffect2ofbgeneratingbadditionalbtaxesbfromballbtaxpayers.
b

a. True
b. False

17.bJason’sbbusinessbwarehousebisbdestroyedbbybfire.bBecausebthebinsurancebproceedsbexceedbthebbasisbofbthebpropertb
bb

y,babgainbresults.bIfbJasonbshortlybreinvestsbthebproceedsbinbabnewbwarehouse,bno2gainbisbrecognizedbdue2tobthebapplicationbofbtbh
ebwherewithalbto2paybconcept.
a. True
b. False

18.bAnbinheritance2taxbisbabtax2onbabdecedent’sbrightbto2passbpropertybatbdeath.
b

a. True
b. False

19.bWhenbinterest2isbchargedbonbabdeficiency,banybpart2ofbabmonthbcountsbas2abfullbmonth.
b

a. True
b. False
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