Test Bank for South-Western Federal Taxation 2027: Individual Income Taxes, 50th Edition (Young, Nellen, Persellin, Lassar, Cuccia & Cripe, 2026) | All Chapters 1–20 Covered

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, TABLE OF CONTENTS
Test Bank: South-Western Federal Taxation 2027: Individual
Income Taxes, 50th Edition
Authors: Young, Nellen, Persellin, Lassar, Cuccia, Cripe
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Part I: INTRODUCTION AND BASIC TAX MODEL
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1. An Introduction to Taxation and Understanding the Federal Tax Law
2. Working with the Tax Law
3. Tax Formula and Tax Determination: An Overview of Property Transactions
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Part II: GROSS INCOME
4. Gross Income: Concepts and Inclusions
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5. Gross Income: Exclusions

Part III: DEDUCTIONS
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6. Deductions and Losses: In General
7. Deductions and Losses: Certain Business Expenses and Losses
8. Depreciation, Cost Recovery, Amortization, and Depletion
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9. Deductions: Employee and Self-Employed-Related Expenses
10. Deductions and Losses: Certain Itemized Deductions
11. Investor Losses
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Part IV: SPECIAL TAX COMPUTATIONS METHODS, TAX CREDITS,
AND PAYMENT PROCEDURES
12. Alternative Minimum Tax
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13. Tax Credits and Payment Procedures

Part V: PROPERTY TRANSACTIONS
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14. Property Transactions: Determination of Gain or Loss, and Basis Considerations
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15. Property Transactions: Nontaxable Exchanges
16. Property Transactions: Capital Gains and Losses
17. Property Transactions: Section 1231, and Recapture Provisions

, Part VI: ACCOUNTING PERIODS, ACCOUNTING METHODS, AND
DEFERRED COMPENSATION
18. Accounting Periods and Methods
19. Deferred Compensation

Part VII: CORPORATIONS AND PARTNERSHIPS
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20. Corporations and Partnerships
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, Ch01: An Introduction to Taxation and Understanding the Federal Tax Law
True / False

1. Before the Sixteenth Amendment to the Constitution was ratified, there was no valid Federal income tax on individuals.
a. True
b. False
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ANSWER: False
RATIONALE: A Federal income tax during the Civil War was sanctioned by the U.S. Supreme Court.
POINTS: 1
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DIFFICULTY: Easy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: IITX.SWFT.2027.LO: 1 02 - LO: 1-02
NATIONAL STANDARDS: United States - BUSPROG: Technology
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STATE STANDARDS: United States - AK - AICPA: FN-Research
KEYWORDS: Bloom's: Remember
OTHER: Time: 2 min.
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DATE CREATED: 3/23/2026 3:56 PM
DATE MODIFIED: 4/13/2026 9:52 AM
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2. The Medicare component of the FICA tax (1.45% on wages) is progressive because the tax due increases as wages
increase.
a. True
b. False
ANSWER: False
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RATIONALE: The Medicare component is proportional because the rate is constant regardless of the wages
earned. There is no cap on the application of the 1.45 percent Medicare tax.
POINTS: 1
DIFFICULTY: Easy
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QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: IITX.SWFT.2027.LO: 1 03 - LO: 1-03
NATIONAL STANDARDS: United States - BUSPROG: Comprehension -
BUSPROG: Comprehension
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STATE STANDARDS: United States - AK - AICPA: FN-Measurement
KEYWORDS: Bloom's: Understand
OTHER: Time: 2 min.
DATE CREATED: 3/23/2026 3:56 PM
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DATE MODIFIED: 4/13/2026 9:52 AM

3. The ratification of the Sixteenth Amendment to the U.S. Constitution was necessary to validate the Federal income tax
on corporations.
a. True
b. False
ANSWER: False
RATIONALE: The Sixteenth Amendment validated the tax only on individuals. The income tax on