MGT 6412: TAXATION OF BUSINESS
INVESTMENT TRANSACTIONS. EXAM
QUESTIONS AND ANSWERS 100% PASS
Tax - ANS Payment to Government unrelated to any specific benefit or service
juristiction - ANS right of government to levy tax on specific person or organization
taxpayer - ANS Any person or organization required by law to pay a tax to the governmental
authority
Tax Base - ANS An item, occurrence, transaction, or activity with respect to which a tax is
levied
Tax Formula - ANS Tax = Tax Base * Tax Rate
Tax Rate Types - ANS Flat or Graduated
Types of tax structures - ANS Flat, Progressive Graduated, or Regressive Graduated
Progressive Tax - ANS Tax increases as income increases (ie. personal income tax rates)
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Regressive Tax - ANS Tax decreases as income decreases (ie. social security tax {don't pay tax
on income over 176,100})
Revenue - ANS Total Tax Collected
Average Tax Rate - ANS Total Tax Paid / Taxable Income
Effective Tax Rate - ANS Total Tax Paid / Total Income
Total Income - ANS Taxable plus Non-Tax Income
Marginal Tax Rate - ANS Tax Rate on next $1 made
Use Tax - ANS Sales tax paid to government for goods bought elsewhere
What is a typical type of local tax that is levied on real estate? Local - ANS Real Property Taxes
Local Tax: What is the term for the tax on personal property based on its value? Local Tax -
ANS Personal Property Tax (ad valorum)
Local Tax: What type of tax is charged on the sale of goods and services? State and Local -
ANS Sales Tax
What is the name of the additional tax applied to specific goods, often included in the price?
State Tax - ANS Excise Tax
What type of tax is based on an individual's income? - ANS Income Tax
What tax is used at all levels of government? - ANS Income Tax
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
INVESTMENT TRANSACTIONS. EXAM
QUESTIONS AND ANSWERS 100% PASS
Tax - ANS Payment to Government unrelated to any specific benefit or service
juristiction - ANS right of government to levy tax on specific person or organization
taxpayer - ANS Any person or organization required by law to pay a tax to the governmental
authority
Tax Base - ANS An item, occurrence, transaction, or activity with respect to which a tax is
levied
Tax Formula - ANS Tax = Tax Base * Tax Rate
Tax Rate Types - ANS Flat or Graduated
Types of tax structures - ANS Flat, Progressive Graduated, or Regressive Graduated
Progressive Tax - ANS Tax increases as income increases (ie. personal income tax rates)
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Regressive Tax - ANS Tax decreases as income decreases (ie. social security tax {don't pay tax
on income over 176,100})
Revenue - ANS Total Tax Collected
Average Tax Rate - ANS Total Tax Paid / Taxable Income
Effective Tax Rate - ANS Total Tax Paid / Total Income
Total Income - ANS Taxable plus Non-Tax Income
Marginal Tax Rate - ANS Tax Rate on next $1 made
Use Tax - ANS Sales tax paid to government for goods bought elsewhere
What is a typical type of local tax that is levied on real estate? Local - ANS Real Property Taxes
Local Tax: What is the term for the tax on personal property based on its value? Local Tax -
ANS Personal Property Tax (ad valorum)
Local Tax: What type of tax is charged on the sale of goods and services? State and Local -
ANS Sales Tax
What is the name of the additional tax applied to specific goods, often included in the price?
State Tax - ANS Excise Tax
What type of tax is based on an individual's income? - ANS Income Tax
What tax is used at all levels of government? - ANS Income Tax
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
