Assignment
Question 1. Which, if any, of the following would tend to decrease the ad valorem tax on real estate?
An abandoned church building is sold to a restaurant chain.
A tax holiday issued to a manufacturing plant expires.
An office building is converted into condominium units to be sold to senior citizens.
A portion of a city park is sold to a car dealership.
None of the above
Question 2. Characteristics of a national sales tax include which of the following?
Like the VAT, it is levied on the producer rather than the consumer.
It is not intended as a replacement for the income tax.
As adopted by Russia, it is proving to be very successful.
In terms of taxpayer compliance, it is easier to evade than the VAT.
None of the above
Question 3. Federal tax legislation generally originates in what body?
Internal Revenue Service
Senate Finance Committee
House Ways and Means Committee
Senate floor
None of the above
Question 4. State income taxes generally can be characterized by _____.
a lack of withholding procedures
a different date for filing than the federal income tax
allowance of a deduction for federal income taxes paid
a deduction (or a credit) for personal and dependency exemptions
None of the above
Question 5. During the current tax year, James had the following transactions.
• Salary $70,000
• Interest income on Xerox bonds 2,000
• Inheritance from aunt 40,000
• Contribution to traditional IRA 5,500
• Capital losses 2,500
Esther's AGI is:_____
$62,000.
$64,000.
$67,000.
$102,000.
$104,000.
Question 6. Troy and Edie are married and under 65 years of age. During 20X2, they furnish more than half of the support of their 18-year-old daughter, Jobeth, who lives with them. Jobeth earns $15,000 from a part-time job, most of which she sets aside for future college expenses. Troy and Edie also provide more than half of the support of Troy's cousin who does not live with them. Edie's father, who died on January 3, 20X2 at the age of 80, has for many years qualified as their dependent. How many personal and dependency exemptions should Troy and Edie claim?
Two
Three
Four
Five
None of the above
Question 7. A qualifying child cannot include _____.
a nonresident alien
a married son who files a joint return
a cousin
a daughter who is away at college
a grandson who is 28 years of age and disabled
Question 8. What are pitfalls in interpreting the Internal Revenue Code?
Defining clauses too carefully
Giving more weight to certain language of the code section than what was intended
Missing cross-referenced but interrelated sections
All of the above
None of the above
Question 9. In § 212(1), the number (1) stands for the _____.
section number
subsection number
paragraph designation
subparagraph designation
None of the above
Question 10. Which of the following is characteristic of the IRS audit procedure?
The percentage of individual income tax returns that the IRS audits has significantly increased over the years.
An office audit takes place at the office of the taxpayer.
One of the factors that leads to an audit is the information provided by informants.
Only IRS special agents can conduct field audits.
None of the above.