,
, South-Western Federal Taxation 2025: Individual Income Taxes 48e Young
b b b b b b b b
Chapterb 01b 2025b Individuals
Answers Included
b
Indicateb whetherb theb statementb isb trueb orb false.
b 1.bbSalesbmadeboverbthebinternetbarebnotbexemptbfrombthebapplicationbofbabgeneralbsalesb(orbuse)btax.
a. True
b. False
b 2.bUponbauditbbybthebIRS,bFaithbisbassessedbabdeficiencybofb$40,000bofbwhichb$25,000bisbattributablebtobnegligence.
Theb20%bnegligencebpenaltybwillbapplybtob$25,000.
a. True
b. False
b 3.bUltimately,bmostbtaxesbarebpaidbbybindividuals.
a. True
b. False
b 4.bEvenbifbpropertybtaxbratesbarebnotbchanged,bthebamountbofbadbvalorembtaxesbimposedbonbrealtybmaybnotbremainbt
hebsame.
a. True
b. False
b 5.bThebprincipalbobjectivebofbthebFUTAbtaxbisbtobprovidebsomebmeasurebofbretirementbsecurity.
a. True
b. False
b 6.bIfbmorebIRSbauditsbarebproducingbabhigherbnumberbofbnob changebresults,bthisbindicatesbincreasedbcompliancebonbt
hebpartbofbtaxpayers.
a. True
b. False
b 7.bAbsafebandbeasybwaybforbabtaxpayerbtobavoidblocalbandbstatebsalesbtaxesbisbtobmakebthebpurchasebinbabstatebthatble
viesbnobsuchbtaxes.
a. True
b. False
b 8.bAbcalendarbyearbtaxpayerbfilesbhisb2023bFederalbincomebtaxbreturnbonbMarchb4,b2024.bThebreturnbreflectsbanbover
paymentbofb$6,000,bandbthebtaxpayerbrequestsbabrefundbofbthisbamount.bThebrefundbisbpaidbonbMayb16,b2024.bThebr
efundbneedbnotbincludebinterest.
a. True
b. False
b 9.b AbtaxbcutbenactedbbybCongressbthatbcontainsbabsunsetb provisionbwillbmakebthebtaxbcutbtemporary.
a. True
b. False
Pageb1
, Name: Class: Date:
Chapterb 01b 2025b Individuals
b 10.bForbFederalbincomebtaxbpurposes,btherebneverbhasbbeenbabgeneralbamnestybperiod.
a. True
b. False
b 11.bToblessenborbeliminatebthebeffectbofbmultiplebtaxation,babtaxpayerbwhobisbsubjectbtobbothbforeignbandbU.S.bincomebt
axesbonbthebsamebincomebisballowedbeitherbabdeductionborbabcreditbforbthebforeignbtaxbpaid.
a. True
b. False
b 12.bBecausebitbisbconsistentbwithbthebwherewithalbtobpaybconcept,bthebtaxblawbrequiresbabsellerbtobrecognizebabgainbinbt
hebyearbthebinstallmentbsaleboccurs.
a. True
b. False
b 13.bThebamountbofbabtaxpayer’sbitemizedbdeductionsbwillbincreasebthebchancebofbbeingbauditedbbybthebIRS.
a. True
b. False
b 14.bInb2024,bJosé,babwidower,bsellsblandb(fairbmarketbvaluebofb$100,000)btobhisbdaughter,bLinda,bforb$50,000.bJosébhasb
notbmadebabtaxablebgift.
a. True
b. False
b 15.bForbomissionsbfrombgrossbincomebinbexcessbofb25%bofbthatbreported,btherebisbnobstatutebofblimitationsbonb
additionalbincomebtaxbassessmentsbbybthebIRS.
a. True
b. False
b 16.bStealthbtaxesbhavebthebeffectbofbgeneratingbadditionalbtaxesbfromballbtaxpayers.
a. True
b. False
b 17.bJason’sbbusinessbwarehousebisbdestroyedbbybfire.bBecausebthebinsurancebproceedsbexceedbthebbasisbofbthebpropert
y,babgainbresults.bIfbJasonbshortlybreinvestsbthebproceedsbinbabnewbwarehouse,bnobgainbisbrecognizedbduebtobthebappl
icationbofbthebwherewithalbtobpaybconcept.
a. True
b. False
b 18.bAnbinheritancebtaxbisbabtaxbonbabdecedent’sbrightbtobpassbpropertybatbdeath.
a. True
b. False
b 19.bWhenbinterestbisbchargedbonbabdeficiency,banybpartbofbabmonthbcountsbasbabfullbmonth.
a. True
b. False
Pageb2
, South-Western Federal Taxation 2025: Individual Income Taxes 48e Young
b b b b b b b b
Chapterb 01b 2025b Individuals
Answers Included
b
Indicateb whetherb theb statementb isb trueb orb false.
b 1.bbSalesbmadeboverbthebinternetbarebnotbexemptbfrombthebapplicationbofbabgeneralbsalesb(orbuse)btax.
a. True
b. False
b 2.bUponbauditbbybthebIRS,bFaithbisbassessedbabdeficiencybofb$40,000bofbwhichb$25,000bisbattributablebtobnegligence.
Theb20%bnegligencebpenaltybwillbapplybtob$25,000.
a. True
b. False
b 3.bUltimately,bmostbtaxesbarebpaidbbybindividuals.
a. True
b. False
b 4.bEvenbifbpropertybtaxbratesbarebnotbchanged,bthebamountbofbadbvalorembtaxesbimposedbonbrealtybmaybnotbremainbt
hebsame.
a. True
b. False
b 5.bThebprincipalbobjectivebofbthebFUTAbtaxbisbtobprovidebsomebmeasurebofbretirementbsecurity.
a. True
b. False
b 6.bIfbmorebIRSbauditsbarebproducingbabhigherbnumberbofbnob changebresults,bthisbindicatesbincreasedbcompliancebonbt
hebpartbofbtaxpayers.
a. True
b. False
b 7.bAbsafebandbeasybwaybforbabtaxpayerbtobavoidblocalbandbstatebsalesbtaxesbisbtobmakebthebpurchasebinbabstatebthatble
viesbnobsuchbtaxes.
a. True
b. False
b 8.bAbcalendarbyearbtaxpayerbfilesbhisb2023bFederalbincomebtaxbreturnbonbMarchb4,b2024.bThebreturnbreflectsbanbover
paymentbofb$6,000,bandbthebtaxpayerbrequestsbabrefundbofbthisbamount.bThebrefundbisbpaidbonbMayb16,b2024.bThebr
efundbneedbnotbincludebinterest.
a. True
b. False
b 9.b AbtaxbcutbenactedbbybCongressbthatbcontainsbabsunsetb provisionbwillbmakebthebtaxbcutbtemporary.
a. True
b. False
Pageb1
, Name: Class: Date:
Chapterb 01b 2025b Individuals
b 10.bForbFederalbincomebtaxbpurposes,btherebneverbhasbbeenbabgeneralbamnestybperiod.
a. True
b. False
b 11.bToblessenborbeliminatebthebeffectbofbmultiplebtaxation,babtaxpayerbwhobisbsubjectbtobbothbforeignbandbU.S.bincomebt
axesbonbthebsamebincomebisballowedbeitherbabdeductionborbabcreditbforbthebforeignbtaxbpaid.
a. True
b. False
b 12.bBecausebitbisbconsistentbwithbthebwherewithalbtobpaybconcept,bthebtaxblawbrequiresbabsellerbtobrecognizebabgainbinbt
hebyearbthebinstallmentbsaleboccurs.
a. True
b. False
b 13.bThebamountbofbabtaxpayer’sbitemizedbdeductionsbwillbincreasebthebchancebofbbeingbauditedbbybthebIRS.
a. True
b. False
b 14.bInb2024,bJosé,babwidower,bsellsblandb(fairbmarketbvaluebofb$100,000)btobhisbdaughter,bLinda,bforb$50,000.bJosébhasb
notbmadebabtaxablebgift.
a. True
b. False
b 15.bForbomissionsbfrombgrossbincomebinbexcessbofb25%bofbthatbreported,btherebisbnobstatutebofblimitationsbonb
additionalbincomebtaxbassessmentsbbybthebIRS.
a. True
b. False
b 16.bStealthbtaxesbhavebthebeffectbofbgeneratingbadditionalbtaxesbfromballbtaxpayers.
a. True
b. False
b 17.bJason’sbbusinessbwarehousebisbdestroyedbbybfire.bBecausebthebinsurancebproceedsbexceedbthebbasisbofbthebpropert
y,babgainbresults.bIfbJasonbshortlybreinvestsbthebproceedsbinbabnewbwarehouse,bnobgainbisbrecognizedbduebtobthebappl
icationbofbthebwherewithalbtobpaybconcept.
a. True
b. False
b 18.bAnbinheritancebtaxbisbabtaxbonbabdecedent’sbrightbtobpassbpropertybatbdeath.
a. True
b. False
b 19.bWhenbinterestbisbchargedbonbabdeficiency,banybpartbofbabmonthbcountsbasbabfullbmonth.
a. True
b. False
Pageb2
