TEST BANK
South-Western Federal Taxation 2025: Comprehensive,
48th Edition by Young Complete 30 Chapters
TEST BANK
Page 1
hu
,TABLE OF CONTENTS hu hu hu
Chapter 1: An Introduction to Taxation and Understanding the Federal Tax Law
hu hu hu hu hu hu hu hu hu hu hu hu
Chapter 2: Working with the Tax Law
hu hu hu hu hu hu hu
Chapter 3: Tax Formula and Tax Determination
hu hu hu hu hu hu hu
Chapter 4: Gross Income: Concepts and Inclusions
hu hu hu hu hu hu hu
Chapter 5: Gross Income: Exclusions
hu hu hu hu hu
Chapter 6: Deductions and Losses: In General 7-1 Bad Debts
hu hu hu hu hu hu hu hu hu hu
Chapter 8: Depreciation, Cost Recovery, Amortization, and Depletion
hu hu hu hu hu hu hu hu
Chapter 9: Deductions: Employee and Self-Employed-Related Expenses
hu hu hu hu hu hu hu
Chapter 10: Deductions and Losses: Certain Itemized Deductions
hu hu hu hu hu hu hu hu
Chapter 11: Investor Losses
hu hu hu hu
Chapter 12: Tax Credits and Payments
hu hu hu hu hu hu
Chapter 13: Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxab
hu hu hu hu hu hu hu hu hu hu hu hu hu
Chapter 14: Property Transactions: Capital Gains and Losses, § 1231, and Recapture Provisions
hu hu hu hu hu hu hu hu hu hu hu hu hu
Chapter 15: The Deduction for Qualified Business Income for Noncorporate Taxpayers
hu hu hu hu hu hu hu hu hu hu hu
Chapter 16: Accounting Periods and Methods
hu hu hu hu hu hu
Chapter 17: Corporations: Introduction and Operating Rules
hu hu hu hu hu hu hu
Chapter 18: Corporations: Organization and Capital Structure
hu hu hu hu hu hu hu
Chapter 19: Corporations: Distributions Not in Complete Liquidation
hu hu hu hu hu hu hu hu
Chapter 20: Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations
hu hu hu hu hu hu hu hu hu hu hu hu
Chapter 21: Partnerships: Formation, Operation, and Basis
hu hu hu hu hu hu hu
Chapter 22: Partnerships: Distributions, Transfer of Interests, and Terminations
hu hu hu hu hu hu hu hu hu
Chapter 23: S Corporations
hu hu hu hu
Chapter 24: Taxes in the Financial Statements
hu hu hu hu hu hu hu
Chapter 25: Exempt Entities
hu hu hu hu
Chapter 26: Multistate Corporate Taxation
hu hu hu hu hu
Chapter 27: Taxation of International Transactions
hu hu hu hu hu hu
Chapter 28: Tax Practice and Ethics
hu hu hu hu hu hu
Chapter 29: The Federal Gift and Estate Taxes
hu hu hu hu hu hu hu hu
Chapter 30: Income Taxation of Trusts and Estates
hu hu hu hu hu hu hu
Page 2
hu
,Chapter 01 2025 - Comprehensive
h u h u h u h u
Answers are at the end of hu hu hu hu hu hu
each chapter hu
Indicate whether the statement is true or false.
h u h u h u h u h u h u h u
h u 1. If more IRS audits are producing a higher number of no change results, this indicates increased compliance on the part
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu h
of taxpayers.
u hu
True
False
hu 2. The first income tax on individuals (after the ratification of the Sixteenth Amendment to the Constitution) levied tax rates f
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
rom a low of 1% to a high of 6%. hu hu hu hu hu hu hu hu hu
True
False
h u 3. Stealth taxes have the effect of generating additional taxes from all taxpayers.
hu hu hu hu hu hu hu hu hu hu hu hu
True
False
h u 4. If fraud is involved, there is no time limit on the assessment of a deficiency by the IRS.
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
True
False
h u 5. Under state amnesty programs, all delinquent and unpaid income taxes are forgiven.
hu hu hu hu hu hu hu hu hu hu hu hu
True
False
h u 6. The Federal estate and gift taxes are examples of progressive rate taxes.
hu hu hu hu hu hu hu hu hu h u hu hu
True
False
h u 7. The IRS is required to redetermine the interest rate on underpayments and overpayments once a year.
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
True
False
h u 8. The Federal income tax on individuals generates more revenue than the Federal income tax on corporations.
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
True
False
h u 9. To mitigate the effect of the annual accounting period concept, the tax law permits the carryforward of excess chari
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
table contributions of a particular year to other years.
hu hu hu hu hu hu hu hu
True
False
h u 10. Unlike FICA, FUTA requires that employers comply with state as well as Federal rules.
hu hu hu hu hu hu hu hu hu hu hu hu hu hu
True
False
Page 3 hu
, Name: Class: Date:
Chapter 01 2025 - Comprehensive
h u h u h u h u
h u 11. If a special agent becomes involved in the audit of a return, this indicates that the IRS suspects that fraud is involved
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
.
True
False
h u 12. Two persons who live in the same state but in different counties may not be subject to the same general sales tax rat
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
e.
True
False
h u 13. Under the usual state inheritance tax, two heirs, a cousin and a son of the deceased, would not be taxed at the sam
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
e rate. hu
True
False
h u 14. Various tax provisions encourage the creation of certain types of retirement plans. Such provisions can be justifie
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
d on both economic and social grounds.
hu hu hu hu hu hu
True
False
h u 15. A parent employs her twin daughters, age 17, in her sole proprietorship. The daughters are not subject to FICA covera
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
ge.
True
False
h u 16. For omissions from gross income in excess of 25% of that reported, there is no statute of limitations on addition
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
al income tax assessments by the IRS.
hu hu hu hu hu hu
True
False
h u 17. Not all of the states that impose a general sales tax also have a use tax.
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
True
False
h u 18. States impose either a state income tax or a general sales tax, but not both types of taxes.
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
True
False
h u 19. The amount of the state excise taxes on gasoline varies from state to state.
hu hu hu hu hu hu hu hu hu hu hu hu hu hu
True
False
h u 20. Upon audit by the IRS, Faith is assessed a deficiency of $40,000 of which $25,000 is attributable to negligence.
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
The 20% negligence penalty will apply to $25,000.
hu hu hu hu hu hu hu
True
False
Page 4
hu
South-Western Federal Taxation 2025: Comprehensive,
48th Edition by Young Complete 30 Chapters
TEST BANK
Page 1
hu
,TABLE OF CONTENTS hu hu hu
Chapter 1: An Introduction to Taxation and Understanding the Federal Tax Law
hu hu hu hu hu hu hu hu hu hu hu hu
Chapter 2: Working with the Tax Law
hu hu hu hu hu hu hu
Chapter 3: Tax Formula and Tax Determination
hu hu hu hu hu hu hu
Chapter 4: Gross Income: Concepts and Inclusions
hu hu hu hu hu hu hu
Chapter 5: Gross Income: Exclusions
hu hu hu hu hu
Chapter 6: Deductions and Losses: In General 7-1 Bad Debts
hu hu hu hu hu hu hu hu hu hu
Chapter 8: Depreciation, Cost Recovery, Amortization, and Depletion
hu hu hu hu hu hu hu hu
Chapter 9: Deductions: Employee and Self-Employed-Related Expenses
hu hu hu hu hu hu hu
Chapter 10: Deductions and Losses: Certain Itemized Deductions
hu hu hu hu hu hu hu hu
Chapter 11: Investor Losses
hu hu hu hu
Chapter 12: Tax Credits and Payments
hu hu hu hu hu hu
Chapter 13: Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxab
hu hu hu hu hu hu hu hu hu hu hu hu hu
Chapter 14: Property Transactions: Capital Gains and Losses, § 1231, and Recapture Provisions
hu hu hu hu hu hu hu hu hu hu hu hu hu
Chapter 15: The Deduction for Qualified Business Income for Noncorporate Taxpayers
hu hu hu hu hu hu hu hu hu hu hu
Chapter 16: Accounting Periods and Methods
hu hu hu hu hu hu
Chapter 17: Corporations: Introduction and Operating Rules
hu hu hu hu hu hu hu
Chapter 18: Corporations: Organization and Capital Structure
hu hu hu hu hu hu hu
Chapter 19: Corporations: Distributions Not in Complete Liquidation
hu hu hu hu hu hu hu hu
Chapter 20: Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations
hu hu hu hu hu hu hu hu hu hu hu hu
Chapter 21: Partnerships: Formation, Operation, and Basis
hu hu hu hu hu hu hu
Chapter 22: Partnerships: Distributions, Transfer of Interests, and Terminations
hu hu hu hu hu hu hu hu hu
Chapter 23: S Corporations
hu hu hu hu
Chapter 24: Taxes in the Financial Statements
hu hu hu hu hu hu hu
Chapter 25: Exempt Entities
hu hu hu hu
Chapter 26: Multistate Corporate Taxation
hu hu hu hu hu
Chapter 27: Taxation of International Transactions
hu hu hu hu hu hu
Chapter 28: Tax Practice and Ethics
hu hu hu hu hu hu
Chapter 29: The Federal Gift and Estate Taxes
hu hu hu hu hu hu hu hu
Chapter 30: Income Taxation of Trusts and Estates
hu hu hu hu hu hu hu
Page 2
hu
,Chapter 01 2025 - Comprehensive
h u h u h u h u
Answers are at the end of hu hu hu hu hu hu
each chapter hu
Indicate whether the statement is true or false.
h u h u h u h u h u h u h u
h u 1. If more IRS audits are producing a higher number of no change results, this indicates increased compliance on the part
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu h
of taxpayers.
u hu
True
False
hu 2. The first income tax on individuals (after the ratification of the Sixteenth Amendment to the Constitution) levied tax rates f
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
rom a low of 1% to a high of 6%. hu hu hu hu hu hu hu hu hu
True
False
h u 3. Stealth taxes have the effect of generating additional taxes from all taxpayers.
hu hu hu hu hu hu hu hu hu hu hu hu
True
False
h u 4. If fraud is involved, there is no time limit on the assessment of a deficiency by the IRS.
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
True
False
h u 5. Under state amnesty programs, all delinquent and unpaid income taxes are forgiven.
hu hu hu hu hu hu hu hu hu hu hu hu
True
False
h u 6. The Federal estate and gift taxes are examples of progressive rate taxes.
hu hu hu hu hu hu hu hu hu h u hu hu
True
False
h u 7. The IRS is required to redetermine the interest rate on underpayments and overpayments once a year.
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
True
False
h u 8. The Federal income tax on individuals generates more revenue than the Federal income tax on corporations.
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
True
False
h u 9. To mitigate the effect of the annual accounting period concept, the tax law permits the carryforward of excess chari
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
table contributions of a particular year to other years.
hu hu hu hu hu hu hu hu
True
False
h u 10. Unlike FICA, FUTA requires that employers comply with state as well as Federal rules.
hu hu hu hu hu hu hu hu hu hu hu hu hu hu
True
False
Page 3 hu
, Name: Class: Date:
Chapter 01 2025 - Comprehensive
h u h u h u h u
h u 11. If a special agent becomes involved in the audit of a return, this indicates that the IRS suspects that fraud is involved
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
.
True
False
h u 12. Two persons who live in the same state but in different counties may not be subject to the same general sales tax rat
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
e.
True
False
h u 13. Under the usual state inheritance tax, two heirs, a cousin and a son of the deceased, would not be taxed at the sam
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
e rate. hu
True
False
h u 14. Various tax provisions encourage the creation of certain types of retirement plans. Such provisions can be justifie
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
d on both economic and social grounds.
hu hu hu hu hu hu
True
False
h u 15. A parent employs her twin daughters, age 17, in her sole proprietorship. The daughters are not subject to FICA covera
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
ge.
True
False
h u 16. For omissions from gross income in excess of 25% of that reported, there is no statute of limitations on addition
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
al income tax assessments by the IRS.
hu hu hu hu hu hu
True
False
h u 17. Not all of the states that impose a general sales tax also have a use tax.
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
True
False
h u 18. States impose either a state income tax or a general sales tax, but not both types of taxes.
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
True
False
h u 19. The amount of the state excise taxes on gasoline varies from state to state.
hu hu hu hu hu hu hu hu hu hu hu hu hu hu
True
False
h u 20. Upon audit by the IRS, Faith is assessed a deficiency of $40,000 of which $25,000 is attributable to negligence.
hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu hu
The 20% negligence penalty will apply to $25,000.
hu hu hu hu hu hu hu
True
False
Page 4
hu
