Page 1
jcgt
,TABLEOFCONTENTS
Chapter1:AnIntroductiontoTaxationandUnderstandingtheFederalTaxLawChapter2: WorkingwiththeTa tg gt
xLaw jc
Chapter03:TaxFormulaandTaxDeterminationChapter 04:GrossInco
tg tg gt tg tg tg tg gt
me:ConceptsandInclusionsChapter05:G rossIncome:Exclusions tg gt gt
Chapter06:DeductionsandLosses:InGeneral
Chapter 07: Deductions and Losses: Certain Business Expenses Chapter 08
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: Depreciation, Cost Recovery, Amortization, and Depletion Chapter 09: Dedu
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ctions: Employee and Self-Employed-
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Related Expense Chapter 10: Deductions and Losses: Certain Itemized De du
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ctionsChapter11:InvestorLosses Chapter12:AlternativeMinimumTax
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Chapter13:Tax CreditsandPayment Procedures 2 2
Chapter14:PropertyTransactions:DeterminationofGainorLoss and jc g t g t Chap g
t ter 15: Property Transactions: Nontaxable Exchanges
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Chapter 16: Property Transactions: Capital Gains and Losses Chapter 17:
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Property Transactions: 1231and Recapture Provisions Chapter18
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:AccountingPeriodsandMethods Chapter19:DeferredCo jc gt
mpensationChapter 20:CorporationsandPartnerships tg gt tg tg
Page 2
jcgt
, Chapter 01 2025 Individuals
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Answers2at2the2end2of2each2chapter
Indicate whether the statement is2 true or false.
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1. Sales made over the internet are not exempt from the application of a general sales (or use) tax.
gt gt gt gt gt gt gt gt gt gt jc gt gt jc gt gt gt gt
a. True
b. False
2. Upon auditby the IRS,Faith is assessed adeficiency of $40,000 of which $25,000 is attributableto negligence.
gt jc gt jc gt jc gt gt gt gt gt gt gt jc jc
The 20% negligence penalty will applyto$25,000.
gt gt jc gt jc
a. True
b. False
3.Ultimately,mosttaxes are paid byindividuals. jc jc jc
a. True
b. False
4. Even if property tax rates are not changed, the amount of ad valorem taxesimposedonrealty may not remainthe same.
gt gt gt gt jc jc gt gt gt gt jc gt gt gt gt gt gt gt gt jc gt
a. True
b. False
5. The principal objective of the FUTA2tax is to provide some measure of retirement security.
gt gt gt gt gt gt g t jc jc gt jc gt gt jc
a. True
b. False
6. If more IRS audits are producing a higher number of no change results, this indicates increased compliance onthe
gt gt gt jc gt gt gt gt gt gt gt jc gt gt gt gt gt gt g t pa rt o gt gt
f taxpayers.
gt
a. True
b. False
7. A safe and easy way for a taxpayer to avoid local and state sales taxes is to make the purchase in a state thatlev ies no suc
gt jc gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt jc gt jc jc gt gt gt gt gt gt
h taxes. gt
a. True
b. False
g 8. A2calendar year taxpayer files his 2023 Federal income tax return on March 4, 2024. The return reflects an overpay ment o
t gt gt gt gt gt gt jc gt gt gt gt gt gt gt gt gt gt gt gt gt gt
f $6,000, and the taxpayer requests a refund of this amount. The refund is paid on May 16, 2024.The refund need not includ e in
gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt jc
terest.
a. True
b. False
9. A tax2cut enacted by Congress that contains a sunset provision will make thetax cut temporary.
gt gt jc gt gt gt gt gt gt gt gt gt gt gt gt gt
a. True
b. False
Page 3 jcgt
, Name: Class: Date: gt
Chapter 01 2025 Individuals
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10. For Federal income tax purposes, there never has beena general amnesty period.
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a. True
b. False
11.Tolessenoreliminatethe effect ofmultipletaxation, a taxpayer who is subject to bothforeign andU.S.income taxe s on the2
gt gt tg gt jc jc gt gt gt jc gt gt jc gt jc tg gt tg gt gt gt gt gt
same income is allowed either a deduction or a credit for the foreign tax paid.
gt gt gt gt gt gt gt gt gt gt gt gt gt jc
a. True
b. False
12. Because it is consistent with the wherewithal to pay concept, the tax law requires a seller to recognize a gain inthe ye ar th
gt jc gt gt gt gt gt gt jc gt gt gt gt gt jc gt gt gt gt gt gt gt gt gt
e installment sale occurs.
gt gt gt
a. True
b. False
13. The2amount of a taxpayer’s itemized deductions will increase the chance of being audited by the IRS.
gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt
a. True
b. False
14. In2024,José,awidower,sells land(fairmarket value of$100,000)tohis daughter,Linda,for$50,000.Joséhas not2
gt gt tg tg tg tg jc tg tg jc jc gt tg tg gt tg gt tg tg gt gt g t ma de gt gt
a taxable gift.
gt gt
a. True
b. False
15. Foromissionsfrom grossincomein excess of 25% of that reported, there is no2statute oflimitations on ad diti onal
gt gt tg gt tg gt gt gt gt gt gt gt gt gt gt gt tg gt gt gt gt gt
incometaxassessmentsbythe IRS. tg gt gt gt jc
a. True
b. False
16. Stealth taxes have2theeffect2ofgenerating additional taxes from all taxpayers.
gt gt gt gt gt jc gt gt gt gt
a. True
b. False
17. Jason’s business warehouseis destroyedby fire. Becausetheinsurance proceeds exceedthe basis of the propert y, a g ain
jc gt gt gt gt gt gt gt gt gt jc gt gt jc gt jc jc gt gt gt gt
results. If Jason shortly reinvests the proceeds in a new warehouse, no gain is recognized due2to the application of t he wher ewitha
gt gt gt gt jc gt jc gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt
l to pay concept.
gt gt gt
a. True
b. False
18. An inheritance tax is a tax2on a decedent’s right to pass property at death.
gt gt gt gt jc gt gt gt jc jc gt jc gt jc
a. True
b. False
19.When interest is charged on adeficiency, anypart of a monthcounts as a fullmonth.
tg gt gt jc gt gt gt gt tg gt gt gt gt jc gt gt gt
Page 4 jcgt
jcgt
,TABLEOFCONTENTS
Chapter1:AnIntroductiontoTaxationandUnderstandingtheFederalTaxLawChapter2: WorkingwiththeTa tg gt
xLaw jc
Chapter03:TaxFormulaandTaxDeterminationChapter 04:GrossInco
tg tg gt tg tg tg tg gt
me:ConceptsandInclusionsChapter05:G rossIncome:Exclusions tg gt gt
Chapter06:DeductionsandLosses:InGeneral
Chapter 07: Deductions and Losses: Certain Business Expenses Chapter 08
gt gt gt gt gt gt gt g t gt
: Depreciation, Cost Recovery, Amortization, and Depletion Chapter 09: Dedu
gt gt gt gt gt gt gt gt gt
ctions: Employee and Self-Employed-
gt gt gt
Related Expense Chapter 10: Deductions and Losses: Certain Itemized De du
gt gt gt gt gt gt gt gt gt gt
ctionsChapter11:InvestorLosses Chapter12:AlternativeMinimumTax
tg g t gt
Chapter13:Tax CreditsandPayment Procedures 2 2
Chapter14:PropertyTransactions:DeterminationofGainorLoss and jc g t g t Chap g
t ter 15: Property Transactions: Nontaxable Exchanges
gt gt gt gt gt
Chapter 16: Property Transactions: Capital Gains and Losses Chapter 17:
gt gt gt gt gt gt gt gt gt
Property Transactions: 1231and Recapture Provisions Chapter18
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:AccountingPeriodsandMethods Chapter19:DeferredCo jc gt
mpensationChapter 20:CorporationsandPartnerships tg gt tg tg
Page 2
jcgt
, Chapter 01 2025 Individuals
gt gt gt
Answers2at2the2end2of2each2chapter
Indicate whether the statement is2 true or false.
jc gt gt gt g t gt gt
1. Sales made over the internet are not exempt from the application of a general sales (or use) tax.
gt gt gt gt gt gt gt gt gt gt jc gt gt jc gt gt gt gt
a. True
b. False
2. Upon auditby the IRS,Faith is assessed adeficiency of $40,000 of which $25,000 is attributableto negligence.
gt jc gt jc gt jc gt gt gt gt gt gt gt jc jc
The 20% negligence penalty will applyto$25,000.
gt gt jc gt jc
a. True
b. False
3.Ultimately,mosttaxes are paid byindividuals. jc jc jc
a. True
b. False
4. Even if property tax rates are not changed, the amount of ad valorem taxesimposedonrealty may not remainthe same.
gt gt gt gt jc jc gt gt gt gt jc gt gt gt gt gt gt gt gt jc gt
a. True
b. False
5. The principal objective of the FUTA2tax is to provide some measure of retirement security.
gt gt gt gt gt gt g t jc jc gt jc gt gt jc
a. True
b. False
6. If more IRS audits are producing a higher number of no change results, this indicates increased compliance onthe
gt gt gt jc gt gt gt gt gt gt gt jc gt gt gt gt gt gt g t pa rt o gt gt
f taxpayers.
gt
a. True
b. False
7. A safe and easy way for a taxpayer to avoid local and state sales taxes is to make the purchase in a state thatlev ies no suc
gt jc gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt jc gt jc jc gt gt gt gt gt gt
h taxes. gt
a. True
b. False
g 8. A2calendar year taxpayer files his 2023 Federal income tax return on March 4, 2024. The return reflects an overpay ment o
t gt gt gt gt gt gt jc gt gt gt gt gt gt gt gt gt gt gt gt gt gt
f $6,000, and the taxpayer requests a refund of this amount. The refund is paid on May 16, 2024.The refund need not includ e in
gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt jc
terest.
a. True
b. False
9. A tax2cut enacted by Congress that contains a sunset provision will make thetax cut temporary.
gt gt jc gt gt gt gt gt gt gt gt gt gt gt gt gt
a. True
b. False
Page 3 jcgt
, Name: Class: Date: gt
Chapter 01 2025 Individuals
gt gt gt
10. For Federal income tax purposes, there never has beena general amnesty period.
gt gt gt gt gt gt gt gt gt gt gt gt gt
a. True
b. False
11.Tolessenoreliminatethe effect ofmultipletaxation, a taxpayer who is subject to bothforeign andU.S.income taxe s on the2
gt gt tg gt jc jc gt gt gt jc gt gt jc gt jc tg gt tg gt gt gt gt gt
same income is allowed either a deduction or a credit for the foreign tax paid.
gt gt gt gt gt gt gt gt gt gt gt gt gt jc
a. True
b. False
12. Because it is consistent with the wherewithal to pay concept, the tax law requires a seller to recognize a gain inthe ye ar th
gt jc gt gt gt gt gt gt jc gt gt gt gt gt jc gt gt gt gt gt gt gt gt gt
e installment sale occurs.
gt gt gt
a. True
b. False
13. The2amount of a taxpayer’s itemized deductions will increase the chance of being audited by the IRS.
gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt
a. True
b. False
14. In2024,José,awidower,sells land(fairmarket value of$100,000)tohis daughter,Linda,for$50,000.Joséhas not2
gt gt tg tg tg tg jc tg tg jc jc gt tg tg gt tg gt tg tg gt gt g t ma de gt gt
a taxable gift.
gt gt
a. True
b. False
15. Foromissionsfrom grossincomein excess of 25% of that reported, there is no2statute oflimitations on ad diti onal
gt gt tg gt tg gt gt gt gt gt gt gt gt gt gt gt tg gt gt gt gt gt
incometaxassessmentsbythe IRS. tg gt gt gt jc
a. True
b. False
16. Stealth taxes have2theeffect2ofgenerating additional taxes from all taxpayers.
gt gt gt gt gt jc gt gt gt gt
a. True
b. False
17. Jason’s business warehouseis destroyedby fire. Becausetheinsurance proceeds exceedthe basis of the propert y, a g ain
jc gt gt gt gt gt gt gt gt gt jc gt gt jc gt jc jc gt gt gt gt
results. If Jason shortly reinvests the proceeds in a new warehouse, no gain is recognized due2to the application of t he wher ewitha
gt gt gt gt jc gt jc gt gt gt gt gt gt gt gt gt gt gt gt gt gt gt
l to pay concept.
gt gt gt
a. True
b. False
18. An inheritance tax is a tax2on a decedent’s right to pass property at death.
gt gt gt gt jc gt gt gt jc jc gt jc gt jc
a. True
b. False
19.When interest is charged on adeficiency, anypart of a monthcounts as a fullmonth.
tg gt gt jc gt gt gt gt tg gt gt gt gt jc gt gt gt
Page 4 jcgt
