13 Jan The percentage of individual

1. Question :

(TCO 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. Question :

(TCO 1) 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. Question :

(TCO 1) 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. Question :

(TCO 8) 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. Question :

(TCO 8) 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. Question :

(TCO 8) 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. Question :

(TCO 8) 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. Question :

(TCO 9) 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. Question :

(TCO 11) In § 212(1), the number (1) stands for the _____.

section number

subsection number

paragraph designation

subparagraph designation

None of the above

Question 10. Question :

(TCO 12) 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