TEST BANK
South-Western Federal Taxation 2025:
Individual Income Taxes, 48th Edition
by James Young Complete Chapters 1 - 20
PageZ1
,TABLE OF CONTENTS
Z Z Z
Chapter 1: An Introduction to Taxation and Understanding the Federal Tax Law
Z Z Z Z Z Z Z Z Z Z Z Z
Chapter 2: Working with the Tax Law
Z Z Z Z Z Z Z
Chapter 03: Tax Formula and Tax Determination
Z Z Z Z Z Z Z
Chapter 04: Gross Income: Concepts and Inclusions
Z Z Z Z Z Z Z
Chapter 05: Gross Income: Exclusions
Z Z Z Z Z
Chapter 06: Deductions and Losses: In General
Z Z Z Z Z Z Z
Chapter 07: Deductions and Losses: Certain Business Expenses
Z Z Z Z Z Z Z Z
Chapter 08: Depreciation, Cost Recovery, Amortization, and Depletion
Z Z Z Z Z Z Z Z
Chapter 09: Deductions: Employee and Self-Employed-Related Expense
Z Z Z Z Z Z Z
Chapter 10: Deductions and Losses: Certain Itemized Deductions
Z Z Z Z Z Z Z Z
Chapter 11: Investor Losses
Z Z Z Z
Chapter 12: Alternative Minimum Tax
Z Z Z Z Z
Chapter 13: Tax Credits and Payment Procedures
Z Z Z Z Z Z Z
Chapter 14: Property Transactions: Determination of Gain or Loss and
Z Z Z Z Z Z Z Z Z Z
Chapter 15: Property Transactions: Nontaxable Exchanges
Z Z Z Z Z Z
Chapter 16: Property Transactions: Capital Gains and Losses
Z Z Z Z Z Z Z Z
Chapter 17: Property Transactions: 1231 and Recapture Provisions
Z Z Z Z Z Z Z Z
Chapter 18: Accounting Periods and Methods
Z Z Z Z Z Z
Chapter 19: Deferred Compensation
Z Z Z Z
Chapter 20: Corporations and Partnerships
Z Z Z Z
PageZ2
, ChapterZ 01Z 2025Z Individuals
AnswersZatZtheZendZofZeachZchapter
IndicateZ whetherZ theZ statementZ isZ trueZ orZ false.
Z Z 1.ZSalesZmadeZoverZtheZinternetZareZnotZexemptZfromZtheZapplicationZofZaZgeneralZsalesZ(orZuse)Ztax.
a. True
b. False
Z Z 2.ZUponZauditZbyZtheZIRS,ZFaithZisZassessedZaZdeficiencyZofZ$40,000ZofZwhichZ$25,000ZisZattributableZtoZnegligence.
TheZ20%ZnegligenceZpenaltyZwillZapplyZtoZ$25,000.
a. True
b. False
Z Z 3.ZUltimately,ZmostZtaxesZareZpaidZbyZindividuals.
a. True
b. False
Z
Z 4.ZEvenZifZpropertyZtaxZratesZareZnotZchanged,ZtheZamountZofZ adZ valoremZtaxesZimposedZonZrealtyZmayZnotZremainZt
heZsame.
a. True
b. False
Z Z 5.ZTheZprincipalZobjectiveZofZtheZFUTAZtaxZisZtoZprovideZsomeZmeasureZofZretirementZsecurity.
a. True
b. False
Z
Z6.ZIfZmoreZIRSZauditsZareZproducingZaZhigherZnumberZofZnoZchangeZresults,ZthisZindicatesZincreasedZcomplianceZonZt
heZpartZofZtaxpayers.
a. True
b. False
Z
Z 7.Z AZ safeZ andZ easyZ wayZ forZaZ taxpayerZ toZ avoidZ localZ andZstateZ salesZ taxesZisZ toZ makeZ theZ purchaseZinZ aZ stateZ th
atZleviesZnoZsuchZtaxes.
a. True
b. False
Z
Z 8.ZAZcalendarZyearZtaxpayerZfilesZhisZ2023ZFederalZincomeZtaxZreturnZonZMarchZ4,Z2024.ZTheZreturnZreflectsZanZover
paymentZofZ$6,000,ZandZtheZtaxpayerZrequestsZaZrefundZofZthisZamount.ZTheZrefundZisZpaidZonZMayZ16,Z2024.ZTheZrefundZn
eedZnotZincludeZinterest.
a. True
b. False
Z Z 9.Z AZtaxZcutZenactedZbyZCongressZthatZcontainsZaZ sunsetZ provisionZwillZmakeZtheZtaxZcutZtemporary.
a. True
b. False
PageZ3
, Name: Class: Date:Z
ChapterZ 01Z 2025Z Individuals
Z Z 10.ZForZFederalZincomeZtaxZpurposes,ZthereZneverZhasZbeenZaZgeneralZamnestyZperiod.
a. True
b. False
Z
Z11.ZToZlessenZorZeliminateZtheZeffectZofZmultipleZtaxation,ZaZtaxpayerZwhoZisZsubjectZtoZbothZforeignZandZU.S.ZincomeZt
axesZonZtheZsameZincomeZisZallowedZeitherZaZdeductionZorZaZcreditZforZtheZforeignZtaxZpaid.
a. True
b. False
Z
Z12.ZBecauseZitZisZconsistentZwithZtheZwherewithalZtoZpayZconcept,ZtheZtaxZlawZrequiresZaZsellerZtoZrecognizeZaZgainZinZ
theZyearZtheZinstallmentZsaleZoccurs.
a. True
b. False
Z Z 13.ZTheZamountZofZaZtaxpayer’sZitemizedZdeductionsZwillZincreaseZtheZchanceZofZbeingZauditedZbyZtheZIRS.
a. True
b. False
Z
Z 14.ZInZ2024,ZJosé,ZaZwidower,ZsellsZlandZ(fairZmarketZvalueZofZ$100,000)ZtoZhisZdaughter,ZLinda,ZforZ$50,000.ZJoséZhas
ZnotZmadeZaZtaxableZgift.
a. True
b. False
Z
Z 15.ZForZomissionsZfromZgrossZincomeZinZexcessZofZ25%ZofZthatZreported,ZthereZisZnoZstatuteZofZlimitationsZon
ZadditionalZincomeZtaxZassessmentsZbyZtheZIRS.
a. True
b. False
Z Z 16.ZStealthZtaxesZhaveZtheZeffectZofZgeneratingZadditionalZtaxesZfromZallZtaxpayers.
a. True
b. False
Z
Z 17.ZJason’sZbusinessZwarehouseZisZdestroyedZbyZfire.ZBecauseZtheZinsuranceZproceedsZexceedZtheZbasisZofZtheZpro
perty,ZaZgainZresults.ZIfZJasonZshortlyZreinvestsZtheZproceedsZinZaZnewZwarehouse,ZnoZgainZisZrecognizedZdueZtoZtheZapplica
tionZofZtheZwherewithalZtoZpayZconcept.
a. True
b. False
Z Z 18.ZAnZinheritanceZtaxZisZaZtaxZonZaZdecedent’sZrightZtoZpassZpropertyZatZdeath.
a. True
b. False
Z Z 19.ZWhenZinterestZisZchargedZonZaZdeficiency,ZanyZpartZofZaZmonthZcountsZasZaZfullZmonth.
a. True
PageZ4
South-Western Federal Taxation 2025:
Individual Income Taxes, 48th Edition
by James Young Complete Chapters 1 - 20
PageZ1
,TABLE OF CONTENTS
Z Z Z
Chapter 1: An Introduction to Taxation and Understanding the Federal Tax Law
Z Z Z Z Z Z Z Z Z Z Z Z
Chapter 2: Working with the Tax Law
Z Z Z Z Z Z Z
Chapter 03: Tax Formula and Tax Determination
Z Z Z Z Z Z Z
Chapter 04: Gross Income: Concepts and Inclusions
Z Z Z Z Z Z Z
Chapter 05: Gross Income: Exclusions
Z Z Z Z Z
Chapter 06: Deductions and Losses: In General
Z Z Z Z Z Z Z
Chapter 07: Deductions and Losses: Certain Business Expenses
Z Z Z Z Z Z Z Z
Chapter 08: Depreciation, Cost Recovery, Amortization, and Depletion
Z Z Z Z Z Z Z Z
Chapter 09: Deductions: Employee and Self-Employed-Related Expense
Z Z Z Z Z Z Z
Chapter 10: Deductions and Losses: Certain Itemized Deductions
Z Z Z Z Z Z Z Z
Chapter 11: Investor Losses
Z Z Z Z
Chapter 12: Alternative Minimum Tax
Z Z Z Z Z
Chapter 13: Tax Credits and Payment Procedures
Z Z Z Z Z Z Z
Chapter 14: Property Transactions: Determination of Gain or Loss and
Z Z Z Z Z Z Z Z Z Z
Chapter 15: Property Transactions: Nontaxable Exchanges
Z Z Z Z Z Z
Chapter 16: Property Transactions: Capital Gains and Losses
Z Z Z Z Z Z Z Z
Chapter 17: Property Transactions: 1231 and Recapture Provisions
Z Z Z Z Z Z Z Z
Chapter 18: Accounting Periods and Methods
Z Z Z Z Z Z
Chapter 19: Deferred Compensation
Z Z Z Z
Chapter 20: Corporations and Partnerships
Z Z Z Z
PageZ2
, ChapterZ 01Z 2025Z Individuals
AnswersZatZtheZendZofZeachZchapter
IndicateZ whetherZ theZ statementZ isZ trueZ orZ false.
Z Z 1.ZSalesZmadeZoverZtheZinternetZareZnotZexemptZfromZtheZapplicationZofZaZgeneralZsalesZ(orZuse)Ztax.
a. True
b. False
Z Z 2.ZUponZauditZbyZtheZIRS,ZFaithZisZassessedZaZdeficiencyZofZ$40,000ZofZwhichZ$25,000ZisZattributableZtoZnegligence.
TheZ20%ZnegligenceZpenaltyZwillZapplyZtoZ$25,000.
a. True
b. False
Z Z 3.ZUltimately,ZmostZtaxesZareZpaidZbyZindividuals.
a. True
b. False
Z
Z 4.ZEvenZifZpropertyZtaxZratesZareZnotZchanged,ZtheZamountZofZ adZ valoremZtaxesZimposedZonZrealtyZmayZnotZremainZt
heZsame.
a. True
b. False
Z Z 5.ZTheZprincipalZobjectiveZofZtheZFUTAZtaxZisZtoZprovideZsomeZmeasureZofZretirementZsecurity.
a. True
b. False
Z
Z6.ZIfZmoreZIRSZauditsZareZproducingZaZhigherZnumberZofZnoZchangeZresults,ZthisZindicatesZincreasedZcomplianceZonZt
heZpartZofZtaxpayers.
a. True
b. False
Z
Z 7.Z AZ safeZ andZ easyZ wayZ forZaZ taxpayerZ toZ avoidZ localZ andZstateZ salesZ taxesZisZ toZ makeZ theZ purchaseZinZ aZ stateZ th
atZleviesZnoZsuchZtaxes.
a. True
b. False
Z
Z 8.ZAZcalendarZyearZtaxpayerZfilesZhisZ2023ZFederalZincomeZtaxZreturnZonZMarchZ4,Z2024.ZTheZreturnZreflectsZanZover
paymentZofZ$6,000,ZandZtheZtaxpayerZrequestsZaZrefundZofZthisZamount.ZTheZrefundZisZpaidZonZMayZ16,Z2024.ZTheZrefundZn
eedZnotZincludeZinterest.
a. True
b. False
Z Z 9.Z AZtaxZcutZenactedZbyZCongressZthatZcontainsZaZ sunsetZ provisionZwillZmakeZtheZtaxZcutZtemporary.
a. True
b. False
PageZ3
, Name: Class: Date:Z
ChapterZ 01Z 2025Z Individuals
Z Z 10.ZForZFederalZincomeZtaxZpurposes,ZthereZneverZhasZbeenZaZgeneralZamnestyZperiod.
a. True
b. False
Z
Z11.ZToZlessenZorZeliminateZtheZeffectZofZmultipleZtaxation,ZaZtaxpayerZwhoZisZsubjectZtoZbothZforeignZandZU.S.ZincomeZt
axesZonZtheZsameZincomeZisZallowedZeitherZaZdeductionZorZaZcreditZforZtheZforeignZtaxZpaid.
a. True
b. False
Z
Z12.ZBecauseZitZisZconsistentZwithZtheZwherewithalZtoZpayZconcept,ZtheZtaxZlawZrequiresZaZsellerZtoZrecognizeZaZgainZinZ
theZyearZtheZinstallmentZsaleZoccurs.
a. True
b. False
Z Z 13.ZTheZamountZofZaZtaxpayer’sZitemizedZdeductionsZwillZincreaseZtheZchanceZofZbeingZauditedZbyZtheZIRS.
a. True
b. False
Z
Z 14.ZInZ2024,ZJosé,ZaZwidower,ZsellsZlandZ(fairZmarketZvalueZofZ$100,000)ZtoZhisZdaughter,ZLinda,ZforZ$50,000.ZJoséZhas
ZnotZmadeZaZtaxableZgift.
a. True
b. False
Z
Z 15.ZForZomissionsZfromZgrossZincomeZinZexcessZofZ25%ZofZthatZreported,ZthereZisZnoZstatuteZofZlimitationsZon
ZadditionalZincomeZtaxZassessmentsZbyZtheZIRS.
a. True
b. False
Z Z 16.ZStealthZtaxesZhaveZtheZeffectZofZgeneratingZadditionalZtaxesZfromZallZtaxpayers.
a. True
b. False
Z
Z 17.ZJason’sZbusinessZwarehouseZisZdestroyedZbyZfire.ZBecauseZtheZinsuranceZproceedsZexceedZtheZbasisZofZtheZpro
perty,ZaZgainZresults.ZIfZJasonZshortlyZreinvestsZtheZproceedsZinZaZnewZwarehouse,ZnoZgainZisZrecognizedZdueZtoZtheZapplica
tionZofZtheZwherewithalZtoZpayZconcept.
a. True
b. False
Z Z 18.ZAnZinheritanceZtaxZisZaZtaxZonZaZdecedent’sZrightZtoZpassZpropertyZatZdeath.
a. True
b. False
Z Z 19.ZWhenZinterestZisZchargedZonZaZdeficiency,ZanyZpartZofZaZmonthZcountsZasZaZfullZmonth.
a. True
PageZ4
