WGU C239 PA Questions 99 Questions with
100% Correct Answers Latest Updated 2026
(27 Pages).
An individual has taxable income of $60,000. The first $20,000 is taxed at 20%, the next $20,000 is
taxed at 20%, and all income above $40,000 is taxed at 20%.Which tax structure is being applied to
the individual's taxable income?
Base
Regressive
Progressive
Proportional - ✔️✔️Proportional
Which federal income tax structure imposes an increasing marginal tax rate as the tax base
increases?
Regressive tax
Incremental tax
Progressive tax
Proportional tax - ✔️✔️Progressive
What would a graph look like for Progressive, Proportional, Incremental, and Regressive tax
structures? - ✔️✔️Progressive- ascending
Proportional- flat line
Incremental- stair-steps
Regressive- descending
[Date] 1
,What describes a gift tax?
Tax on the retail sale of particular products
Tax on the fair market value of wealth transfers
Tax on the retail price of goods and services
Tax on income earned by an individual - ✔️✔️Tax on the fair market value of wealth transfers
What is a key element of an economy tax structure?
Attracts and stimulates investment
Helps ensure equality and ability to pay
Assists in reducing unemployment and inflation
Requires minimal compliance and administration costs - ✔️✔️Requires minimal compliance and
administration costs
Which objective of the federal tax law requires that a good tax system minimizes the compliance and
administration costs?
Equity
Convenience
Certainty
Economy - ✔️✔️Economy
Consider how the tax burden should be distributed across taxpayers - ✔️✔️Questions of Equity
Means taxpayers should be able to determine when, where, and how much to pay - ✔️✔️Certainty
[Date] 2
,A tax system should minimize compliance and administration costs - ✔️✔️Convenience
Which partnership item would flow through to an individual's tax return?
Capital gains
Gross income
Partnership exemptions
Dividends received deduction - ✔️✔️Capital Gains
An Eleventh Circuit client who files in the U.S. Court of Federal Claims wants to know whether to
include the terms of multiple options to renew a sale-leaseback to calculate a deduction.
What is the authoritative reference?
A Second Circuit case which used disjunctive analysis
A tax court decision which used economic substance
An Eleventh Circuit Case which analyzed sale-leaseback transactions that generate tax deductions
A U.S. Court of Federal Claims case which analyzed sale-leaseback transactions for operating
equipment - ✔️✔️A U.S. Court of Federal Claims case which analyzed sale-leaseback transactions
for operating equipment
Which tax rate calculation is an appropriate step in tax planning strategy to reduce tax?
[Date] 3
, The raverage rtax rrate, rbecause rit rrepresents rthe rpercent rof rtax ron reach rdollar
The rtax-exempt rtax rrate, rbecause reffective rtax rplanning rutilizes rtax rexempt rbonds
The reffective rtax rrate, rbecause reconomic rincome ris rless rbroad rthan rtaxable rincome
The rmarginal rtax rrate, rbecause rit rrepresents rthe rtax rapplicable rto rthe rnext rtaxable rdollar r- r✔️✔️The
marginal rtax rrate, rbecause rit rrepresents rthe rtax rapplicable rto rthe rnext rtaxable rdollar
Where ris ra rcorporation's rnon-business rincome rallocated rwhen rcomputing rthe rcorporation's rstate
taxable rincome?
To rmultiple rstates rper rthe rfunctional rtest
To rone rstate rper rthe rtransaction rtest
To rthe rstate rof rthe rcorporate rheadquarters rof rthe rpayer
To reach rstate rwhere rthe rincome ris rearned r- r✔️✔️To rthe rstate rof rthe rcorporate rheadquarters rof rthe
payer
What ris ra rkey roperating relement rof rdoing rbusiness ras ran rS rcorporation?
Fiscal ryear rends rcan rbe rchosen rwithout restablishing ra rbusiness rpurpose.
Corporate rprofits rare rtaxed rat rthe rshareholders rlevel rin rthe ryear rearned.
Shareholders rare rnot rsubject rto rthe rat-risk ror rpassive ractivity rlimitations.
Nontaxable r fringe r benefits r are r available r to r S r corporation r employee r shareholders. r - r ✔️✔️Corporate
profits rare rtaxed rat rthe rshareholders rlevel rin rthe ryear rearned.
[Date] 4
100% Correct Answers Latest Updated 2026
(27 Pages).
An individual has taxable income of $60,000. The first $20,000 is taxed at 20%, the next $20,000 is
taxed at 20%, and all income above $40,000 is taxed at 20%.Which tax structure is being applied to
the individual's taxable income?
Base
Regressive
Progressive
Proportional - ✔️✔️Proportional
Which federal income tax structure imposes an increasing marginal tax rate as the tax base
increases?
Regressive tax
Incremental tax
Progressive tax
Proportional tax - ✔️✔️Progressive
What would a graph look like for Progressive, Proportional, Incremental, and Regressive tax
structures? - ✔️✔️Progressive- ascending
Proportional- flat line
Incremental- stair-steps
Regressive- descending
[Date] 1
,What describes a gift tax?
Tax on the retail sale of particular products
Tax on the fair market value of wealth transfers
Tax on the retail price of goods and services
Tax on income earned by an individual - ✔️✔️Tax on the fair market value of wealth transfers
What is a key element of an economy tax structure?
Attracts and stimulates investment
Helps ensure equality and ability to pay
Assists in reducing unemployment and inflation
Requires minimal compliance and administration costs - ✔️✔️Requires minimal compliance and
administration costs
Which objective of the federal tax law requires that a good tax system minimizes the compliance and
administration costs?
Equity
Convenience
Certainty
Economy - ✔️✔️Economy
Consider how the tax burden should be distributed across taxpayers - ✔️✔️Questions of Equity
Means taxpayers should be able to determine when, where, and how much to pay - ✔️✔️Certainty
[Date] 2
,A tax system should minimize compliance and administration costs - ✔️✔️Convenience
Which partnership item would flow through to an individual's tax return?
Capital gains
Gross income
Partnership exemptions
Dividends received deduction - ✔️✔️Capital Gains
An Eleventh Circuit client who files in the U.S. Court of Federal Claims wants to know whether to
include the terms of multiple options to renew a sale-leaseback to calculate a deduction.
What is the authoritative reference?
A Second Circuit case which used disjunctive analysis
A tax court decision which used economic substance
An Eleventh Circuit Case which analyzed sale-leaseback transactions that generate tax deductions
A U.S. Court of Federal Claims case which analyzed sale-leaseback transactions for operating
equipment - ✔️✔️A U.S. Court of Federal Claims case which analyzed sale-leaseback transactions
for operating equipment
Which tax rate calculation is an appropriate step in tax planning strategy to reduce tax?
[Date] 3
, The raverage rtax rrate, rbecause rit rrepresents rthe rpercent rof rtax ron reach rdollar
The rtax-exempt rtax rrate, rbecause reffective rtax rplanning rutilizes rtax rexempt rbonds
The reffective rtax rrate, rbecause reconomic rincome ris rless rbroad rthan rtaxable rincome
The rmarginal rtax rrate, rbecause rit rrepresents rthe rtax rapplicable rto rthe rnext rtaxable rdollar r- r✔️✔️The
marginal rtax rrate, rbecause rit rrepresents rthe rtax rapplicable rto rthe rnext rtaxable rdollar
Where ris ra rcorporation's rnon-business rincome rallocated rwhen rcomputing rthe rcorporation's rstate
taxable rincome?
To rmultiple rstates rper rthe rfunctional rtest
To rone rstate rper rthe rtransaction rtest
To rthe rstate rof rthe rcorporate rheadquarters rof rthe rpayer
To reach rstate rwhere rthe rincome ris rearned r- r✔️✔️To rthe rstate rof rthe rcorporate rheadquarters rof rthe
payer
What ris ra rkey roperating relement rof rdoing rbusiness ras ran rS rcorporation?
Fiscal ryear rends rcan rbe rchosen rwithout restablishing ra rbusiness rpurpose.
Corporate rprofits rare rtaxed rat rthe rshareholders rlevel rin rthe ryear rearned.
Shareholders rare rnot rsubject rto rthe rat-risk ror rpassive ractivity rlimitations.
Nontaxable r fringe r benefits r are r available r to r S r corporation r employee r shareholders. r - r ✔️✔️Corporate
profits rare rtaxed rat rthe rshareholders rlevel rin rthe ryear rearned.
[Date] 4
