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

TEST BANK

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




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,TABLE OF CONTENTS
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Chapter 1: An Introduction to Taxation and Understanding the Federal Tax Law
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Chapter 2: Working with the Tax Law
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Chapter 03: Tax Formula and Tax Determination
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Chapter 04: Gross Income: Concepts and Inclusions
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Chapter 05: Gross Income: Exclusions
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Chapter 06: Deductions and Losses: In General
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Chapter 07: Deductions and Losses: Certain Business Expenses
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Chapter 08: Depreciation, Cost Recovery, Amortization, and Depletion
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Chapter 09: Deductions: Employee and Self-Employed-Related Expense
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Chapter 10: Deductions and Losses: Certain Itemized Deductions
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Chapter 11: Investor Losses
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Chapter 12: Alternative Minimum Tax
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Chapter 13: Tax Credits and Payment Procedures
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Chapter 14: Property Transactions: Determination of Gain or Loss and
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Chapter 15: Property Transactions: Nontaxable Exchanges
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Chapter 16: Property Transactions: Capital Gains and Losses
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Chapter 17: Property Transactions: 1231 and Recapture Provisions
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Chapter 18: Accounting Periods and Methods
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Chapter 19: Deferred Compensation
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Chapter 20: Corporations and Partnerships
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, Chapter 01 2025 Individuals
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Answers at the end of each chapter
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Indicate whether the statement is true or false.
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hs h s 1. Sales made over the internet are not exempt from the application of a general sales (or use) tax.
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a. True
b. False

hs h s 2. Upon audit by the IRS, Faith is assessed a deficiency of $40,000 of which $25,000 is attributable to negligence.
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The 20% negligence penalty will apply to $25,000.
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a. True
b. False

hs h s 3. Ultimately, most taxes are paid by individuals.
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a. True
b. False

hs h s 4. Even if property tax rates are not changed, the amount of ad valorem taxes imposed on realty may not remainthe same.
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a. True
b. False

hs h s 5. The principal objective of the FUTA tax is to provide some measure of retirement security.
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a. True
b. False
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6. If more IRS audits are producing a higher number of no change results, this indicates increased compliance onth
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e part of taxpayers.
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a. True
b. False
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7. A safe and easy way for a taxpayer to avoid local and state sales taxes is to make the purchase in a state tha
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tlevies no such taxes.
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a. True
b. False
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8. A calendar year taxpayer files his 2023 Federal income tax return on March 4, 2024. The return reflects an overpa
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yment of $6,000, and the taxpayer requests a refund of this amount. The refund is paid on May 16, 2024.The refund need n
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ot include interest.
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a. True
b. False

hs h s 9. A tax cut enacted by Congress that contains a sunset provision will make the tax cut temporary.
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a. True
b. False




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, Name: Class: Date: hs




Chapter 01 2025 Individuals
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hs h s 10. For Federal income tax purposes, there never has been a general amnesty period.
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a. True
b. False
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11. To lessen or eliminate the effect of multiple taxation, a taxpayer who is subject to both foreign and U.S. income taxe
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s on the same income is allowed either a deduction or a credit for the foreign tax paid.
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a. True
b. False
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12. Because it is consistent with the wherewithal to pay concept, the tax law requires a seller to recognize a gain inth
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e year the installment sale occurs.
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a. True
b. False

hs h s 13. The amount of a taxpayer’s itemized deductions will increase the chance of being audited by the IRS.
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a. True
b. False
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14. In 2024, José, a widower, sells land (fair market value of $100,000) to his daughter, Linda, for $50,000. José has not
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made a taxable gift. hs hs hs



a. True
b. False
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15. For omissions from gross income in excess of 25% of that reported, there is no statute of limitations on ad
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ditional income tax assessments by the IRS.
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a. True
b. False

hs h s 16. Stealth taxes have the effect of generating additional taxes from all taxpayers.
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a. True
b. False
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17. Jason’s business warehouse is destroyed by fire. Because the insurance proceeds exceed the basis of the prop
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erty, a gain results. If Jason shortly reinvests the proceeds in a new warehouse, no gain is recognized due to the application
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of the wherewithal to pay concept.
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a. True
b. False

hs h s 18. An inheritance tax is a tax on a decedent’s right to pass property at death.
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a. True
b. False

hs h s 19. When interest is charged on a deficiency, any part of a month counts as a full month.
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a. True
b. False

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