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