South-Western Federal Taxation 2024 Comprehensive Volume 47th Edition By Young, Persellin, Nellen, Maloney, Cuccia, Lassar, Cripe (Test Bank Latest Edition 2023-24, Grade A+, 100%)

(South-Western Federal Taxation 2024 Comprehensive Volume 47e by Young, Persellin, Nellen, Maloney,
Cuccia, Lassar, Cripe)
(Test Bank all Chapters)
Chapter 01: An Introduction to Taxation and Understanding the Federal Tax Law

Indicate whether the statement is true or false.

1. Because the law is complicated, most individual taxpayers are not able to complete their Federal income tax returns
without outside assistance.
a. True
b. False

2. 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

3. Before the Sixteenth Amendment to the Constitution was ratified, there was no valid Federal income tax on individuals.
a. True
b. False

4. The first income tax on individuals (after the ratification of the Sixteenth Amendment to the Constitution) levied tax
rates from a low of 1% to a high of 6%.
a. True
b. False

5. The Federal income tax on individuals generates more revenue than the Federal income tax on corporations.
a. True
b. False

6. The pay-as-you-go feature of the Federal income tax on individuals conforms to Adam Smith’s canon (principle) of
certainty.
a. True
b. False

7. The Medicare component of the FICA tax (1.45% on wages) is progressive since the tax due increases as wages
increase.
a. True
b. False

8. The Federal estate and gift taxes are examples of progressive rate taxes.
a. True
b. False

9. The Federal excise tax on gasoline has a proportional effect on all taxpayers (that is, neither progressive or regressive).
a. True
b. False

10. Currently, the Federal corporate income tax is less progressive than the individual income tax.
a. True
b. False

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Chapter 01: An Introduction to Taxation and Understanding the Federal Tax Law
11. Mona inherits her mother’s personal residence, which she converts to a furnished rental house. These changes should
affect the amount of ad valorem property taxes levied on the properties.
a. True
b. False

12. A fixture will be subject to the ad valorem tax on personalty rather than the ad valorem tax on realty.
a. True
b. False

13. Even if property tax rates are not changed, the amount of ad valorem taxes imposed on realty may not remain the
same.
a. True
b. False

14. The ad valorem tax on personal use personalty is more often avoided by taxpayers than the ad valorem tax on business
use personalty.
a. True
b. False

15. An excise tax is often used to try to influence behavior.
a. True
b. False

16. There is a Federal excise tax on hotel occupancy.
a. True
b. False

17. The Federal gas-guzzler tax applies only to automobiles manufactured overseas and imported into the United States.
a. True
b. False

18. The amount of the state excise taxes on gasoline varies from state to state.
a. True
b. False

19. Not all of the states that impose a general sales tax also have a use tax.
a. True
b. False

20. Sales made over the internet are not exempt from the application of a general sales (or use) tax.
a. True
b. False

21. Two persons who live in the same state but in different counties may not be subject to the same general sales tax rate.
a. True
b. False
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Chapter 01: An Introduction to Taxation and Understanding the Federal Tax Law


22. States impose either a state income tax or a general sales tax, but not both types of taxes.
a. True
b. False

23. A safe and easy way for a taxpayer to avoid local and state sales taxes is to make the purchase in a state that levies no
such taxes.
a. True
b. False

24. On transfers by death, the Federal government relies on an estate tax, while states may impose an estate tax, an
inheritance tax, both taxes, or neither tax.
a. True
b. False

25. An inheritance tax is a tax on a decedent’s right to pass property at death.
a. True
b. False

26. One of the major reasons for the enactment of the Federal estate tax was to prevent large amounts of wealth from
being accumulated within a family unit.
a. True
b. False

27. Under Clint’s will, all of his property passes to either the Lutheran Church or to his wife. No Federal estate tax will be
due on Clint’s death.
a. True
b. False

28. Under the usual state inheritance tax, two heirs, a cousin and a son of the deceased, would not be taxed at the same
rate.
a. True
b. False

29. The annual exclusion, currently $17,000, is available for gift and estate tax purposes.
a. True
b. False

30. In 2023, José, a widower, sells land (fair market value of $100,000) to his daughter, Linda, for $50,000. José has not
made a taxable gift.
a. True
b. False

31. Julius, a married taxpayer, makes gifts to each of his six children. A maximum of twelve annual exclusions could be
allowed as to these gifts.
a. True
b. False
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Chapter 01: An Introduction to Taxation and Understanding the Federal Tax Law


32. One of the motivations for making a gift is to save on income taxes.
a. True
b. False

33. The formula for the Federal income tax on corporations is the same as that applicable to individuals.
a. True
b. False

34. A state income tax can be imposed on nonresident taxpayers who earn income within the state on an itinerant basis.
a. True
b. False

35. For state income tax purposes, some states allow a credit for dependents rather than a deduction.
a. True
b. False

36. Some states use their state income tax return as a means of collecting unpaid use tax.
a. True
b. False

37. No state may offer an income tax amnesty program more than once.
a. True
b. False

38. For Federal income tax purposes, there never has been a general amnesty period.
a. True
b. False

39. Under state amnesty programs, all delinquent and unpaid income taxes are forgiven.
a. True
b. False

40. When a state decouples from a Federal tax provision, it means that this provision will not apply for state income tax
purposes.
a. True
b. False

41. The principal objective of the FUTA tax is to provide some measure of retirement security.
a. True
b. False

42. Currently, the tax base for the Social Security component of the FICA is not limited to a dollar amount.
a. True
b. False

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