South-Western Federal Taxation 2025: Individual Income Taxes, 48th Edition – James Young – Complete Test Bank (Chapters 1–20)

TEST BANK
South-Western Federal Taxation 2025:
Individual Income Taxes, 48th Edition
by James Young Complete Chapters 1 - 20




Page 1
bc

,TABLE OF CONTENTS bc bc bc




Chapter 1: An Introduction to Taxation and Understanding the Federal Tax Law
bc bc bc bc bc bc bc bc bc bc bc bc




Chapter 2: Working with the Tax Law
bc bc bc bc bc bc bc




Chapter 03: Tax Formula and Tax Determination
bc bc bc bc bc bc bc




Chapter 04: Gross Income: Concepts and Inclusions
bc bc bc bc bc bc bc




Chapter 05: Gross Income: Exclusions
bc bc bc bc bc




Chapter 06: Deductions and Losses: In General
bc bc bc bc bc bc bc




Chapter 07: Deductions and Losses: Certain Business Expenses
bc bc bc bc bc bc bc bc




Chapter 08: Depreciation, Cost Recovery, Amortization, and Depletion
bc bc bc bc bc bc bc bc




Chapter 09: Deductions: Employee and Self-Employed-Related Expense
bc bc bc bc bc bc bc




Chapter 10: Deductions and Losses: Certain Itemized Deductions
bc bc bc bc bc bc bc bc




Chapter 11: Investor Losses
bc bc bc bc




Chapter 12: Alternative Minimum Tax
bc bc bc bc bc




Chapter 13: Tax Credits and Payment Procedures
bc bc bc bc bc bc bc




Chapter 14: Property Transactions: Determination of Gain or Loss and
bc bc bc bc bc bc bc bc bc bc




Chapter 15: Property Transactions: Nontaxable Exchanges
bc bc bc bc bc bc




Chapter 16: Property Transactions: Capital Gains and Losses
bc bc bc bc bc bc bc bc




Chapter 17: Property Transactions: 1231 and Recapture Provisions
bc bc bc bc bc bc bc bc




Chapter 18: Accounting Periods and Methods
bc bc bc bc bc bc




Chapter 19: Deferred Compensation
bc bc bc bc




Chapter 20: Corporations and Partnerships
bc bc bc bc




Page 2
bc

, Chapter 01 2025 Individuals
b c b c b c




Answers at the end of each chapter
bc bc bc bc bc bc




Indicate whether the statement is true or false.
b c b c b c b c b c b c b c




bc b c 1. Sales made over the internet are not exempt from the application of a general sales (or use) tax.
bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc




a. True
b. False

bc b c 2. UponauditbytheIRS,Faithisassessedadeficiencyof$40,000ofwhich$25,000isattributabletonegligence.
bc cb cb cb cb cb cb cb cb cb cb cb cb cb cb cb cb cb cb




The20%negligencepenaltywillapplyto$25,000.
cb cb cb cb cb cb cb




a. True
b. False

bc b c 3. Ultimately,mosttaxesarepaidbyindividuals.
bc cb cb cb cb cb cb




a. True
b. False

bc b c 4. Even if property tax rates are not changed, the amount of ad valorem taxes imposed on realty may not remainthe same.
bc bc bc bc bc bc bc bc bc bc bc b c b c bc bc bc bc bc bc bc cb bc




a. True
b. False

bc b c 5. TheprincipalobjectiveoftheFUTAtaxistoprovidesomemeasureofretirementsecurity.
bc bc bc cb bc bc bc bc bc bc cb bc bc bc bc




a. True
b. False
bc




6. If more IRS audits are producing a higher number of no change results, this indicates increased compliance onthe part of t
b c bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc cb bc bc bc




axpayers.
a. True
b. False
bc




7. A safe and easy way for a taxpayer to avoid local and state sales taxes is to make the purchase in a state thatlevies no s
b c b c bc bc bc bc b c bc bc bc bc bc bc bc bc b c bc bc bc bc bc bc bc bc b c cb bc bc




uch taxes. bc




a. True
b. False
bc




8. A calendar year taxpayer files his 2023 Federal income tax return on March 4, 2024. The return reflects an overpayment of
b c bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc




$6,000, and the taxpayer requests a refund of this amount. The refund ispaid on May16, 2024.The refund need not include interest.
bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc cb bc bc bc bc bc




a. True
b. False

bc b c 9. A tax cut enacted by Congress that contains a sunset provision will make the tax cut temporary.
b c bc bc bc bc bc bc bc bc b c b c bc bc bc bc bc bc




a. True
b. False




Page 3 bc

, Name: Class: Date: bc




Chapter 01 2025 Individuals
b c b c b c




bc b c 10. For Federal income tax purposes, there never has been a general amnesty period.
bc bc bc bc bc bc bc bc bc bc bc bc bc




a. True
b. False
bc




11.Tolessenoreliminatetheeffectofmultipletaxation,ataxpayerwhoissubjecttobothforeignandU.S.income taxes on the sa
b c cb cb cb cb cb cb cb cb cb cb cb bc cb cb cb cb cb cb cb cb bc bc bc bc




me income is allowed either a deduction or a credit for the foreign tax paid.
bc bc bc bc bc bc bc bc bc bc bc bc bc bc




a. True
b. False
bc




12. Because it is consistent with the wherewithal to pay concept, the tax law requires a seller to recognize a gain inthe year the i
b c bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc cb bc bc bc




nstallment sale occurs. bc bc




a. True
b. False

bc b c 13. The amount of a taxpayer’s itemized deductions will increase the chance of being audited by the IRS.
bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc




a. True
b. False

bc b c 14.In2024,José,awidower,sellsland(fairmarketvalueof$100,000)tohisdaughter,Linda,for$50,000.Joséhas not made a taxable gift.
bc cb cb cb cb cb cb cb cb cb cb cb cb cb cb cb cb cb cb cb bc bc bc bc bc




a. True
b. False
bc




15. Foromissionsfromgrossincomeinexcessof25%ofthatreported,thereisnostatuteoflimitationson additional in
b c bc bc cb bc cb bc cb cb bc cb bc cb bc bc cb bc cb bc cb bc bc




come tax assessments by the IRS. bc bc bc bc bc




a. True
b. False

bc b c 16. Stealth taxes have the effect of generating additional taxes from all taxpayers.
bc bc bc bc bc bc bc bc bc bc bc bc




a. True
b. False
bc




17. Jason’s business warehouse is destroyed by fire. Because the insurance proceeds exceed the basis of the property,a ga
b c bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc




in results. If Jasonshortlyreinvests theproceeds in anew warehouse, no gain is recognized due to the application of the wherewithal t
bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc




o pay concept.
bc bc




a. True
b. False

bc b c 18. An inheritance tax is a tax on a decedent’s right to pass property at death.
bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc




a. True
b. False

bc b c 19. When interestis chargedon a deficiency, any part of a month counts as a full month.
bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc bc




a. True
b. False



Page 4 bc