Question 1

State income taxes generally can be characterized by:

Accepted Answer

A)   The same date for filing as the Federal income tax.
B)   No provision for withholding procedures.
C)   Allowance of a deduction for Federal income taxes paid.
D)   Applying only to individuals and not applying to corporations.
E)   None of these.F) B) and C)
G) A) and E)

Question 2

A characteristic of FUTA is that:

Accepted Answer

A)   It is imposed on both employer and employee.
B)   It is imposed solely on the employee.
C)   Compliance requires following guidelines issued by both state and Federal regulatory authorities.
D)   It is applicable to spouses of employees but not to any children under age 18.
E)   None of these.F) B) and D)
G) A) and B)

Question 3

Which, if any, is not one of Adam Smith's canons principles)  of taxation?

Accepted Answer

A)   Economy in collection
B)   Certainty
C)   Convenience of payment
D)   Simplicity
E)   EqualityF) A) and B)
G) B) and D)

Question 4

Property can be transferred within the family group by gift or at death. One motivation for preferring the gift approach is:

Accepted Answer

A)   To take advantage of the higher unified transfer tax credit available under the gift tax.
B)   To avoid a future decline in value of the property transferred.
C)   To take advantage of the per donee annual exclusion.
D)   To shift income to higher bracket donees.
E)   None of these.F) A) and E)
G) A) and B)

Question 5

The U.S. either Federal, state, or local)  does not impose:

Accepted Answer

A)   Franchise taxes.
B)   Severance taxes.
C)   Occupational fees.
D)   Custom duties.
E)   Export duties.F) None of the above
G) All of the above

Question 6

The IRS agent auditing the return will issue an RAR even if the taxpayer owes no additional taxes.

Accepted Answer

A) True 
 B)False

Question 7

Under the usual state inheritance tax, two heirs, a cousin and a son of the deceased, would not be taxed at the same rate.

Accepted Answer

A) True 
 B)False

Question 8

An excise tax is often used to try to influence behavior.

Accepted Answer

A) True 
 B)False

Question 9

Which, if any, of the following statements best describes the history of the Federal income tax?

Accepted Answer

A)   It did not exist during the Civil War.
B)   The Federal income tax on corporations was held by the U.S. Supreme Court to be allowable under the U.S. Constitution.
C)   The Federal income tax on individuals was held by the U.S. Supreme Court to be allowable under the U.S. Constitution.
D)   Both the Federal income tax on individuals and on corporations was held by the U.S. Supreme Court to be contrary to the U.S. Constitution.
E)   None of these.F) None of the above
G) A) and E)

Question 10

The ad valorem tax on personal use personalty is more often avoided by taxpayers than the ad valorem tax on business use personalty.

Accepted Answer

A) True 
 B)False

Question 11

Two persons who live in the same state but in different counties may not be subject to the same general sales tax rate.

Accepted Answer

A) True 
 B)False

Question 12

Taxes levied by all states include:

Accepted Answer

A)   Tobacco excise tax.
B)   Individual income tax.
C)   Inheritance tax.
D)   General sales tax.
E)   None of these.F) None of the above
G) A) and B)

Question 13

There is a Federal excise tax on hotel occupancy.

Accepted Answer

A) True 
 B)False

Question 14

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.

Accepted Answer

A) True 
 B)False

Question 15

The pay-as-you-go feature of the Federal income tax on individuals conforms to Adam Smith's canon principle) of certainty.

Accepted Answer

A) True 
 B)False

Question 16

The principal objective of the FUTA tax is to provide some measure of retirement security.

Accepted Answer

A) True 
 B)False

Question 17

Before proposing that the state's sales tax be expanded to include food, a legislator should ask whether:

Accepted Answer

A)   the state tax agency will allow this expansion.
B)   a majority of his constituents agree.
C)   grocery stores will be able to collect the tax.
D)   the state's constitution allows for this tax.E) A) and C)
F) A) and D)

Question 18

The first income tax on individuals after the ratification of the Sixteenth Amendment to the Constitution) levied tax rates from a low of 2% to a high of 6%.

Accepted Answer

A) True 
 B)False

Question 19

Not all of the states that impose a general sales tax also have a use tax.

Accepted Answer

A) True 
 B)False

Question 20

In 1987, Roy leased real estate to Drab Corporation for 20 years. Drab Corporation made significant capital improvements to the property. In 2006, Drab decides not to renew the lease and vacates the property. At that time, the value of the improvements is $800,000. Roy sells the real estate in 2018 for $1,200,000 of which $900,000 is attributable to the improvements. When is Roy taxed on the improvements made by Drab Corporation?

Accepted Answer

Roy is not subject to taxation on the im...

Exam 1: An Introduction to Taxation and Understanding the Federal Tax Law

Which, if any, is not one of Adam Smith's canons principles) of taxation?

Correct Answer
verified

There is a Federal excise tax on hotel occupancy.

Correct Answer
verified

Property can be transferred within the family group by gift or at death. One motivation for preferring the gift approach is:

Correct Answer
verified

The first income tax on individuals after the ratification of the Sixteenth Amendment to the Constitution) levied tax rates from a low of 2% to a high of 6%.

Correct Answer
verified

An excise tax is often used to try to influence behavior.

Correct Answer
verified

The pay-as-you-go feature of the Federal income tax on individuals conforms to Adam Smith's canon principle) of certainty.

Correct Answer
verified

Under the usual state inheritance tax, two heirs, a cousin and a son of the deceased, would not be taxed at the same rate.

Correct Answer
verified

Which, if any, of the following statements best describes the history of the Federal income tax?

Correct Answer
verified

Two persons who live in the same state but in different counties may not be subject to the same general sales tax rate.

Correct Answer
verified

Not all of the states that impose a general sales tax also have a use tax.

Correct Answer
verified

The U.S. either Federal, state, or local) does not impose:

Correct Answer
verified

The ad valorem tax on personal use personalty is more often avoided by taxpayers than the ad valorem tax on business use personalty.

Correct Answer
verified

A characteristic of FUTA is that:

Correct Answer
verified

The IRS agent auditing the return will issue an RAR even if the taxpayer owes no additional taxes.

Correct Answer
verified

State income taxes generally can be characterized by:

Correct Answer
verified

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.

Correct Answer
verified

Before proposing that the state's sales tax be expanded to include food, a legislator should ask whether:

Correct Answer
verified

Correct Answer
verified
Roy is not subject to taxation on the im...
View Answer

Taxes levied by all states include:

Correct Answer
verified

The principal objective of the FUTA tax is to provide some measure of retirement security.

Correct Answer
verified

Exam 1: An Introduction to Taxation and Understanding the Federal Tax Law

Which, if any, is not one of Adam Smith's canons principles) of taxation?

Correct AnswerverifiedShow Answer

There is a Federal excise tax on hotel occupancy.

Correct AnswerverifiedShow Answer

Property can be transferred within the family group by gift or at death. One motivation for preferring the gift approach is:

Correct AnswerverifiedShow Answer

The first income tax on individuals after the ratification of the Sixteenth Amendment to the Constitution) levied tax rates from a low of 2% to a high of 6%.

Correct AnswerverifiedShow Answer

An excise tax is often used to try to influence behavior.

Correct AnswerverifiedShow Answer

The pay-as-you-go feature of the Federal income tax on individuals conforms to Adam Smith's canon principle) of certainty.

Correct AnswerverifiedShow Answer

Under the usual state inheritance tax, two heirs, a cousin and a son of the deceased, would not be taxed at the same rate.

Correct AnswerverifiedShow Answer

Which, if any, of the following statements best describes the history of the Federal income tax?

Correct AnswerverifiedShow Answer

Two persons who live in the same state but in different counties may not be subject to the same general sales tax rate.

Correct AnswerverifiedShow Answer

Not all of the states that impose a general sales tax also have a use tax.

Correct AnswerverifiedShow Answer

The U.S. either Federal, state, or local) does not impose:

Correct AnswerverifiedShow Answer

The ad valorem tax on personal use personalty is more often avoided by taxpayers than the ad valorem tax on business use personalty.

Correct AnswerverifiedShow Answer

A characteristic of FUTA is that:

Correct AnswerverifiedShow Answer

The IRS agent auditing the return will issue an RAR even if the taxpayer owes no additional taxes.

Correct AnswerverifiedShow Answer

State income taxes generally can be characterized by:

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Before proposing that the state's sales tax be expanded to include food, a legislator should ask whether:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedRoy is not subject to taxation on the im...View AnswerShow Answer

Taxes levied by all states include:

Correct AnswerverifiedShow Answer

The principal objective of the FUTA tax is to provide some measure of retirement security.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
Roy is not subject to taxation on the im...
View Answer

Correct Answer
verified

Correct Answer
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