Test Bank for South-Western Federal Taxation 2025: Individual Income Taxes, 48th Edition by James C. Young | Complete Chapters

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




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,TABLE OF CONTENTS
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Chapter 1: An Introduction to Taxation and Understanding the Federal Tax Law
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Chapter 2: Working with the Tax Law
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Chapter 03: Tax Formula and Tax Determination
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Chapter 04: Gross Income: Concepts and Inclusions
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Chapter 05: 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
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Chapter 08: Depreciation, Cost Recovery, Amortization, and Depletion
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Chapter 09: Deductions: Employee and Self-Employed-Related Expense
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Chapter 10: Deductions and Losses: Certain Itemized Deductions
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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
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Chapter 15: Property Transactions: Nontaxable Exchanges
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Chapter 16: Property Transactions: Capital Gains and Losses
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Chapter 17: Property Transactions: 1231 and Recapture Provisions
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Chapter 18: Accounting Periods and Methods
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Chapter 19: Deferred Compensation
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Chapter 20: Corporations and Partnerships
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, Chapteru 01u 2025u Individuals

Answersuatutheuenduofueachuchapter

Indicateu whetheru theu statementu isu trueu oru false.
u u 1.uSalesumadeuoverutheuinternetuareunotuexemptufromutheuapplicationuofuaugeneralusalesu(oruuse)utax.
a. True
b. False

u u 2.uUponuauditubyutheuIRS,uFaithuisuassesseduaudeficiencyuofu$40,000uofuwhichu$25,000uisuattributableutounegligence.
Theu20%unegligenceupenaltyuwilluapplyutou$25,000.
a. True
b. False

u u 3.uUltimately,umostutaxesuareupaidubyuindividuals.
a. True
b. False

u u 4.uEvenuifupropertyutaxuratesuareunotuchanged,utheuamountuofu aduvaloremutaxesuimposeduonurealtyumayunoturemainutheusame.
a. True
b. False

u u 5.uTheuprincipaluobjectiveuofutheuFUTAutaxuisutouprovideusomeumeasureuofuretirementusecurity.
a. True
b. False
u

u 6.uIfumoreuIRSuauditsuareuproducinguauhigherunumberuofunouchangeuresults,uthisuindicatesuincreaseducomplianceuonutheu

partuofutaxpayers.
a. True
b. False
u

u 7.u Au safeu andu easyu wayu foru autaxpayeru tou avoidulocalu andu stateu salesu taxesu isu toumakeu theu purchaseu inu au stateu thatulev

iesunousuchutaxes.
a. True
b. False
u

u 8.uAucalendaruyearutaxpayerufilesuhisu2023uFederaluincomeutaxureturnuonuMarchu4,u2024.uTheureturnureflectsuanuoverpay

mentuofu$6,000,uandutheutaxpayerurequestsuaurefunduofuthisuamount.uTheurefunduisupaiduonuMayu16,u2024.uTheurefunduneedunotu
includeuinterest.
a. True
b. False

u u 9.uAutaxucutuenactedubyuCongressuthatucontainsuau sunsetu provisionuwillumakeutheutaxucututemporary.
a. True
b. False



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, Name: Class: Date:u

Chapteru 01u 2025u Individuals

u u 10.uForuFederaluincomeutaxupurposes,uthereuneveruhasubeenuaugeneraluamnestyuperiod.
a. True
b. False
u

u11.uToulessenuorueliminateutheueffectuofumultipleutaxation,uautaxpayeruwhouisusubjectutoubothuforeignuanduU.S.uincomeutaxe
suonutheusameuincomeuisuallowedueitheruaudeductionuoruaucredituforutheuforeignutaxupaid.
a. True
b. False
u

u12.uBecauseuituisuconsistentuwithutheuwherewithalutoupayuconcept,utheutaxulawurequiresuausellerutourecognizeuaugainuinutheu
yearutheuinstallmentusaleuoccurs.
a. True
b. False

u u 13.uTheuamountuofuautaxpayer’suitemizedudeductionsuwilluincreaseutheuchanceuofubeinguauditedubyutheuIRS.
a. True
b. False
u

u 14.uInu2024,uJosé,uauwidower,usellsulandu(fairumarketuvalueuofu$100,000)utouhisudaughter,uLinda,uforu$50,000.uJoséuhasunotu

madeuautaxableugift.
a. True
b. False
u

u 15.uForuomissionsufromugrossuincomeuinuexcessuofu25%uofuthatureported,uthereuisunoustatuteuofulimitationsuonuad

ditionaluincomeutaxuassessmentsubyutheuIRS.
a. True
b. False

u u 16.uStealthutaxesuhaveutheueffectuofugeneratinguadditionalutaxesufromuallutaxpayers.
a. True
b. False
u

u 17.uJason’subusinessuwarehouseuisudestroyedubyufire.uBecauseutheuinsuranceuproceedsuexceedutheubasisuofutheupropert
y,uaugainuresults.uIfuJasonushortlyureinvestsutheuproceedsuinuaunewuwarehouse,unougainuisurecognizedudueutoutheuapplicationuofut
heuwherewithalutoupayuconcept.
a. True
b. False

u u 18.uAnuinheritanceutaxuisuautaxuonuaudecedent’surightutoupassupropertyuatudeath.
a. True
b. False

u u 19.uWhenuinterestuisuchargeduonuaudeficiency,uanyupartuofuaumonthucountsuasuaufullumonth.
a. True

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