TEST BANK FOR
#z #z
South-Western Federal Taxation 2025: Individual Income Taxes 48e Young
# z #z #z #z #z #z #z #z #z
Chapter 1-20 #z
Chapter #z 01 #z 2025 #zIndividuals
Answers Included #z
Indicate # z whether # z the # z statement # z is # z true
# z or # z false.
1. Sales made over the internet are not exempt from the application of a general sales (or use) tax.
a. True
b. False
2. Upon audit by the IRS, Faith is assessed a deficiency of $40,000 of which $25,000 is attributable to negligence.
The 20% negligence penalty will apply to $25,000.
a. True
b. False
3. Ultimately, most taxes are paid by individuals.
a. True
b. False
4. 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
5. The principal objective of the FUTA tax is to provide some measure of retirement security.
a. True
b. False
6. If more IRS audits are producing a higher number of no change results, this indicates increased compliance on
the part of taxpayers.
a. True
b. False
7. 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
8. A calendar year taxpayer files his 2023 Federal income tax return on March 4, 2024. The return reflects an
overpayment of $6,000, and the taxpayer requests a refund of this amount. The refund is paid on May 16, 2024.
a.
# z True
b.
9. #z#zA #ztax #zcut #z enacted #z by #zCongress #z that #zcontains #za #zsunset # z provision #zwill #zmake #zthe #ztax #zcut
False
#ztemporary.
a. # z True
b. #zFalse
, The refund need not include interest.
a.
# z True
b.
9. #z#zA #ztax #zcut #z enacted #z by #zCongress #z that #zcontains #za #zsunset # z provision #zwill #zmake #zthe #ztax #zcut
False
#ztemporary.
a. # z True
b. #zFalse
,operty #zat #zdeath.
10. #zFor #zFederal #zincome #ztax #zpurposes, #zthere #znever #zhas #zbeen #za #zgeneral #zamnesty #zperiod.
a. True
b. False
11. #zTo #zlessen #zor #zeliminate #zthe #zeffect #zof #zmultiple #ztaxation, #za #ztaxpayer #zwho #zis #zsubject #zto #zboth #zforeign #zand
#zU.S. #zincome #ztaxes #zon #zthe #zsame #zincome #zis #zallowed #zeither #za #zdeduction #zor #za #zcredit #zfor #zthe #zforeign
#ztax #zpaid.
a. True
b. False
12. #zBecause #zit #zis #zconsistent #zwith #zthe #zwherewithal #zto #zpay #zconcept, #zthe #ztax #zlaw #zrequires #za #zseller #zto
#zrecognize #za #zgain #zin #zthe #zyear #zthe #zinstallment #zsale #zoccurs.
a. True
b. False
13. #zThe #zamount #zof #za #ztaxpayer’s #zitemized #zdeductions #zwill #zincrease #zthe #zchance #zof #zbeing #zaudited #zby #zthe #zIRS.
a. True
b. False
14. #zIn #z2024, #zJosé, #za #zwidower, #zsells #zland #z(fair #zmarket #zvalue #zof #z$100,000) #zto #zhis #zdaughter, #zLinda, #zfor #z$50,000.
#zJosé #zhas #znot #zmade #za #ztaxable #zgift.
a. True
b. False
15. #zFor #zomissions #zfrom #zgross #zincome #zin #zexcess #zof #z25% #zof #zthat #zreported, #zthere #zis #zno #zstatute #zof
#zlimitations #zon #zadditional #zincome #ztax #zassessments #zby #zthe #zIRS.
a. True
b. False
16. #zStealth #ztaxes #zhave #zthe #zeffect #zof #zgenerating #zadditional #ztaxes #zfrom #zall #ztaxpayers.
a. True
b. False
17. #zJason’s #zbusiness #zwarehouse #zis #zdestroyed #zby #zfire. #zBecause #zthe #zinsurance #zproceeds #zexceed #zthe #zbasis
#zof #zthe #zproperty, #za #zgain #zresults. #zIf #zJason #zshortly #zreinvests #zthe #zproceeds #zin #za #znew #zwarehouse, #zno #zgain #zis
#zrecognized #zdue #zto #zthe #zapplication #zof #zthe #zwherewithal #zto #zpay #zconcept.
a. True
a.
# z True
b.
19. #z#zWhen
False #zinterest #zis #zcharged #zon #za #zdeficiency, #zany #zpart #zof #za #zmonth #zcounts #zas #za
#zfull #zmonth.
a. # z True
b. #zFalse
, b. False
18. #zAn #zinheritance #ztax #zis #za #ztax #zon #za #zdecedent’s #zright #zto #zpass #zpr
a.
# z True
b.
19. #z#zWhen
False #zinterest #zis #zcharged #zon #za #zdeficiency, #zany #zpart #zof #za #zmonth #zcounts #zas #za
#zfull #zmonth.
a. # z True
b. #zFalse
#z #z
South-Western Federal Taxation 2025: Individual Income Taxes 48e Young
# z #z #z #z #z #z #z #z #z
Chapter 1-20 #z
Chapter #z 01 #z 2025 #zIndividuals
Answers Included #z
Indicate # z whether # z the # z statement # z is # z true
# z or # z false.
1. Sales made over the internet are not exempt from the application of a general sales (or use) tax.
a. True
b. False
2. Upon audit by the IRS, Faith is assessed a deficiency of $40,000 of which $25,000 is attributable to negligence.
The 20% negligence penalty will apply to $25,000.
a. True
b. False
3. Ultimately, most taxes are paid by individuals.
a. True
b. False
4. 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
5. The principal objective of the FUTA tax is to provide some measure of retirement security.
a. True
b. False
6. If more IRS audits are producing a higher number of no change results, this indicates increased compliance on
the part of taxpayers.
a. True
b. False
7. 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
8. A calendar year taxpayer files his 2023 Federal income tax return on March 4, 2024. The return reflects an
overpayment of $6,000, and the taxpayer requests a refund of this amount. The refund is paid on May 16, 2024.
a.
# z True
b.
9. #z#zA #ztax #zcut #z enacted #z by #zCongress #z that #zcontains #za #zsunset # z provision #zwill #zmake #zthe #ztax #zcut
False
#ztemporary.
a. # z True
b. #zFalse
, The refund need not include interest.
a.
# z True
b.
9. #z#zA #ztax #zcut #z enacted #z by #zCongress #z that #zcontains #za #zsunset # z provision #zwill #zmake #zthe #ztax #zcut
False
#ztemporary.
a. # z True
b. #zFalse
,operty #zat #zdeath.
10. #zFor #zFederal #zincome #ztax #zpurposes, #zthere #znever #zhas #zbeen #za #zgeneral #zamnesty #zperiod.
a. True
b. False
11. #zTo #zlessen #zor #zeliminate #zthe #zeffect #zof #zmultiple #ztaxation, #za #ztaxpayer #zwho #zis #zsubject #zto #zboth #zforeign #zand
#zU.S. #zincome #ztaxes #zon #zthe #zsame #zincome #zis #zallowed #zeither #za #zdeduction #zor #za #zcredit #zfor #zthe #zforeign
#ztax #zpaid.
a. True
b. False
12. #zBecause #zit #zis #zconsistent #zwith #zthe #zwherewithal #zto #zpay #zconcept, #zthe #ztax #zlaw #zrequires #za #zseller #zto
#zrecognize #za #zgain #zin #zthe #zyear #zthe #zinstallment #zsale #zoccurs.
a. True
b. False
13. #zThe #zamount #zof #za #ztaxpayer’s #zitemized #zdeductions #zwill #zincrease #zthe #zchance #zof #zbeing #zaudited #zby #zthe #zIRS.
a. True
b. False
14. #zIn #z2024, #zJosé, #za #zwidower, #zsells #zland #z(fair #zmarket #zvalue #zof #z$100,000) #zto #zhis #zdaughter, #zLinda, #zfor #z$50,000.
#zJosé #zhas #znot #zmade #za #ztaxable #zgift.
a. True
b. False
15. #zFor #zomissions #zfrom #zgross #zincome #zin #zexcess #zof #z25% #zof #zthat #zreported, #zthere #zis #zno #zstatute #zof
#zlimitations #zon #zadditional #zincome #ztax #zassessments #zby #zthe #zIRS.
a. True
b. False
16. #zStealth #ztaxes #zhave #zthe #zeffect #zof #zgenerating #zadditional #ztaxes #zfrom #zall #ztaxpayers.
a. True
b. False
17. #zJason’s #zbusiness #zwarehouse #zis #zdestroyed #zby #zfire. #zBecause #zthe #zinsurance #zproceeds #zexceed #zthe #zbasis
#zof #zthe #zproperty, #za #zgain #zresults. #zIf #zJason #zshortly #zreinvests #zthe #zproceeds #zin #za #znew #zwarehouse, #zno #zgain #zis
#zrecognized #zdue #zto #zthe #zapplication #zof #zthe #zwherewithal #zto #zpay #zconcept.
a. True
a.
# z True
b.
19. #z#zWhen
False #zinterest #zis #zcharged #zon #za #zdeficiency, #zany #zpart #zof #za #zmonth #zcounts #zas #za
#zfull #zmonth.
a. # z True
b. #zFalse
, b. False
18. #zAn #zinheritance #ztax #zis #za #ztax #zon #za #zdecedent’s #zright #zto #zpass #zpr
a.
# z True
b.
19. #z#zWhen
False #zinterest #zis #zcharged #zon #za #zdeficiency, #zany #zpart #zof #za #zmonth #zcounts #zas #za
#zfull #zmonth.
a. # z True
b. #zFalse
