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Question;71. When;Congress enacts a tax cut that is phased in over a period of years, revenue;neutrality is achieved.;a. True;b. False;?;72. A tax cut;enacted by Congress that contains a sunset provision will make the tax cut;temporary.;a. True;b. False;73. The tax;law provides various tax credits, deductions, and exclusions that are designed;to encourage taxpayers to obtain additional education. These provisions can be;justified on both economic and equity grounds.;a. True;b. False;74. Various;tax provisions encourage the creation of certain types of retirement plans.;Such provisions can be justified on both economic and social grounds.;a. True;b. False;75. To lessen;or eliminate, the effect of multiple taxation, a taxpayer who is subject to;both foreign and U.S. income taxes on the same income is allowed either a;deduction or a credit for the foreign tax paid.;a. True;b. False;76. To;mitigate the effect of the annual accounting period concept, the tax law;permits the carryforward to other years of the excess charitable contributions;of a particular year.;a. True;b. False;77. Jason?s;business warehouse is destroyed by fire. As the insurance proceeds exceed the;basis of the property, a gain results. If Jason shortly reinvests the proceeds;in a new warehouse, no gain is recognized due to the application of the;wherewithal to pay concept.;a. True;b. False;78. As it is;consistent with the wherewithal to pay concept, the tax law requires a seller;to recognize gain in the year the installment sale occurs.;a. True;b. False;79. Stealth;taxes have the effect of generating additional taxes from all taxpayers.;a. True;b. False;80. A;provision in the law that compels accrual basis taxpayers to pay a tax on;prepaid income in the year received and not when earned is consistent with;generally accepted accounting principles.;a. True;b. False;81. As a;matter of administrative convenience, the IRS would prefer to have Congress;decrease (rather than increase) the amount of the standard deduction allowed to;individual taxpayers.;a. True;b. False;82. In cases;of doubt, courts have held that tax relief provisions should be broadly construed;in favor of taxpayers.;a. True;b. False;ANSWER: False;RATIONALE: Such;provisions should be narrowly construed in favor of taxpayers.;83. On;occasion, Congress has to enact legislation that clarifies the tax law in order;to change a result reached by the U.S. Supreme Court.;a. True;b. False;?;84. Which, if;any, of the following statements best describes the history of the Federal;income tax?;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;the above.;85. Which, if;any, is not one of Adam Smith?s canons of taxation?;a. Economy.;b. Certainty.;c. Convenience.;d. Simplicity.;e. Equality.;86. Which, if;any, of the following taxes are proportional (rather than progressive)?;a. State;general sales tax.;b. Federal;corporate income tax.;c. Federal;estate tax.;d. Federal;gift tax.;e. All of;the above.;87. Which, if;any, of the following transactions will increase a taxing jurisdiction?s;revenue from the ad valorem tax imposed on real estate?;a. A;resident dies and leaves his farm to his church.;b. A large;property owner issues a conservation easement as to some of her land.;c. A tax;holiday issued 10 years ago has expired.;d. A;bankrupt motel is acquired by the Red Cross and is to be used to provide;housing for homeless persons.;e. None of;the above.;88. Which, if;any, of the following transactions will decrease a taxing jurisdiction?s ad;valorem tax revenue imposed on real estate?;a. A tax;holiday is granted to an out-of-state business that is searching for a new;factory site.;b. An;abandoned church is converted to a restaurant.;c. A public;school is razed and turned into a city park.;d. A local;university sells a dormitory that will be converted for use as an apartment;building.;e. None of;the above.;89. Which, if;any, of the following is a typical characteristic of an ad valorem tax on;personalty?;a. Taxpayer;compliance is greater for personal use property than for business use property.;b. The tax;on automobiles sometimes considers the age of the vehicle.;c. Most;states impose a tax on intangibles.;d. The tax;on intangibles generates considerable revenue since it is difficult for;taxpayers to avoid.;e. None of;the above.;90. Federal;excise taxes that are no longer imposed include;a. Tax on;air travel.;b. Tax on;wagering.;c. Tax on;the manufacture of sporting equipment.;d. Tax on;alcohol.;e. None of;the above.;91. Taxes not;imposed by the Federal government include;a. Tobacco;excise tax.;b. Customs;duties (tariffs on imports).;c. Tax on;rent cars.;d. Gas;guzzler tax.;e. None of;the above.;92. Taxes;levied by both states and the Federal government include;a. General;sales tax.;b. Custom;duties.;c. Hotel;occupancy tax.;d. Franchise;tax.;e. None of;the above.;93. Taxes;levied by all states include;a. Tobacco;excise tax.;b. Individual;income tax.;c. Inheritance;tax.;d. General;sales tax.;e. None of;the above.;94. A use tax;is imposed by;a. The;Federal government and all states.;b. The;Federal government and a majority of the states.;c. All;states and not the Federal government.;d. Most of the;states and not the Federal government.;e. None of;the above.;95. Burt and;Lisa are married and live in a common law state. Burt wants to make gifts to;their four children in 2014. What is the maximum amount of the annual exclusion;they will be allowed for these gifts?;a. $14,000.;b. $28,000.;c. $56,000.;d. $112,000.;e. None of the above.;?;96. Property;can be transferred within the family group by gift or at death. One motivation;for preferring the gift approach is;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;the above.;97. Indicate;which, if any, statement is incorrect. State income taxes;a. Can;piggyback to the Federal version.;b. Cannot;apply to visiting nonresidents.;c. Can;decouple from the Federal version.;d. Can;provide occasional amnesty programs.;e. None of;the above.;98. State;income taxes generally can be characterized by;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;the above.;99. A;characteristic of FICA is that;a. It does;not apply when one spouse works for the other spouse.;b. It is;imposed only on the employer.;c. It;provides a modest source of income in the event of loss of employment.;d. It is;administered by both state and Federal governments.;e. None of;the above.;100. A;characteristic of FUTA is that;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;the above.

 

Paper#39447 | Written in 18-Jul-2015

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