Income Tax Fundamentals 2016 34th Edition-Test Bank

1. Identify which of the subsequent isn’t a objective of the levy regulation?
a.  Promoting particular social goals such as donations to good causes.
b.  Promoting certain economic goals such as a successful business community.
c.  Encouraging smaller families.
d.  Generating revenue to manage the government.
e.  None of the above are aims of the tax regulation.
ANSWER:   c
POINTS:   1
DIFFICULTY:   Easy
QUESTION TYPE:   Multiple Selection
HAS ATTRIBUTES:   False
OBJECTIVES:   RTP.WABG.16.LO:1-01 – LO:1-01
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
STATE STANDARDS:   United States – AK – AICPA: FN-Reporting
KEY PHRASES:   Bloom’s: Knowledge
DATE PRODUCED:   9/2/2015 1:33 PM
DATE CHANGED:   9/2/2015 1:33 PM
QUESTION ID:   JFND-GO4G-EPNW-CC3O
QUESTION GLOBAL ID:   GCID-E7BW-1TBP-CCAD-1QJI-GO5U-Q3J1-GO41-4A3A-GWH1-4ATT-GR4N-4QBI-8R3N-4PBT-GTUD-GCDB-C3DI-GWN8-EPRW-EMJS-GO3U-YQBW-GE3S-G3TS-GWSU-CPTS-8RSU-EAJT-GOSU-Q3MR-CESS-RA3T-GFTD-13TU-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE

2. Which one of these agreements was enacted by Congress to fulfill a societal objective of the tax law?
a.  The deduction for job search expenditures.
b.  The charitable deduction.
c.  The moving expense deduction for adjusted gross income.
d.  The deduction for soil and water conservation costs available to farmers.
e.  Nothing from the category.
ANSWER:   b
RATIONALE:   Allowances for job search costs, moving costs, and soil and water conservation expenditures for farmers are economic aims.
POINTS:   1
DIFFICULTY:   Easy
QUESTION TYPE:   Multiple Selection
HAS ATTRIBUTES:   False
OBJECTIVES:   RTP.WABG.16.LO:1-01 – LO:1-01
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
STATE STANDARDS:   United States – AK – AICPA: FN-Reporting
KEY PHRASES:   Bloom’s: Knowledge
DATE PRODUCED:   9/2/2015 1:33 PM
DATE CHANGED:   9/2/2015 1:33 PM
QUESTION ID:   JFND-GO4G-EPNW-CC3Z
QUESTION GLOBAL ID:   GCID-E7BW-1TBP-CCAD-1QJI-GO5U-Q3J1-GO41-4A3A-GWH1-4ATT-GR4N-4QBI-8R3N-4PBT-GTUD-GCDB-C3DI-GWN8-EPRW-EMJ1-GY4U-NPT1-C31U-RQBI-GOSU-YQBZ-CRSU-YQBS-GOSU-Y3UR-GASS-KCJA-COHG-NAJI-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE

3. Specify two universal objectives of the tax code.
ANSWER:   The levy regulations back up social goals, economic goals, and raising revenue.
POINTS:   1
DIFFICULTY:   Easy
QUESTION TYPE:   Open Ended Question
HAS ATTRIBUTES:   False
OBJECTIVES:   RTP.WABG.16.LO:1-01 – LO:1-01
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
STATE STANDARDS:   United States – AK – AICPA: FN-Reporting
KEY PHRASES:   Bloom’s: Knowledge
DATE PRODUCED:   9/2/2015 1:33 PM
DATE CHANGED:   9/2/2015 1:33 PM
QUESTION ID:   JFND-GO4G-EPNW-CPTZ
QUESTION GLOBAL ID:   GCID-E7BW-1TBP-CCAD-1QJI-GO5U-Q3J1-GO41-4A3A-GWH1-4ATT-GR4N-4QBI-8R3N-4PBT-GTUD-GCDB-C3DI-GWN8-EPRW-EMMG-GITU-CAUN-GJTU-EQJU-8YSS-NCTU-CESU-EQBT-GOSU-G3DG-CRSU-O3BS-CC4S-EQJA-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE

4. Indicate with a “Yes” for each of the following if it’s a target of the tax regulation. Specify with a “No” otherwise.
a. To deliver a vehicle to every American.
b. To support donations to charities.
c. To persuade tax payers to send their kids to college.
d. To gather funds to operate the government.
e. To support the use of solar energy.
ANSWER:   a. No
b. Yes
c. Yes
d. Yes
e. Yes
POINTS:   1
DIFFICULTY:   Easy
QUESTION TYPE:   Open Ended Question
HAS ATTRIBUTES:   False
OBJECTIVES:   RTP.WABG.16.LO:1-01 – LO:1-01
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
STATE STANDARDS:   United States – AK – AICPA: FN-Reporting
KEY PHRASES:   Bloom’s: Knowledge
DATE PRODUCED:   9/2/2015 1:33 PM
DATE CHANGED:   9/2/2015 1:33 PM
QUESTION ID:   JFND-GO4G-EPNW-CPTS
QUESTION GLOBAL ID:   GCID-E7BW-1TBP-CCAD-1QJI-GO5U-Q3J1-GO41-4A3A-GWH1-4ATT-GR4N-4QBI-8R3N-4PBT-GTUD-GCDB-C3DI-GWN8-EPRW-EMJ1-8YHD-QQJ3-CT1U-KCMF-GYSS-KA3T-CRSU-Q3DG-GOSS-ECBA-GCSS-E3JW-GH4U-YPBA-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE

5. The US central levy regulation’s single purpose is to gather funds.
a.  True
b.  False
ANSWER:   False
RATIONALE:   The levy regulation has numerous goals encompassing gathering funds.
POINTS:   1
DIFFICULTY:   Easy
QUESTION TYPE:   True or False
HAS ATTRIBUTES:   False
OBJECTIVES:   RTP.WABG.16.LO:1-01 – LO:1-01
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
STATE STANDARDS:   United States – AK – AICPA: FN-Reporting
KEY PHRASES:   Bloom’s: Knowledge
DATE PRODUCED:   9/2/2015 1:33 PM
DATE CHANGED:   9/2/2015 1:33 PM
QUESTION ID:   JFND-GO4G-EPNW-CPJA
QUESTION GLOBAL ID:   GCID-E7BW-1TBP-CCAD-1QJI-GO5U-Q3J1-GO41-4A3A-GWH1-4ATT-GR4N-4QBI-8R3N-4PBT-GTUD-GCDB-C3DI-GWN8-EPRW-EMMD-CE4U-GCUB-GITD-Q3BI-GESS-E3BS-CRSU-OP5G-GOSU-OCUD-COSU-ECTT-G7OU-O3MG-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE

6. Which one of the following is not a objective of the levy regulation?
a.  Maintaining uniform tax payments for all individuals.
b.  Economic goals including reduction in joblessness.
c.  Social goals such as reducing adoption costs.
d.  Raising sufficient revenue to manage the government.
ANSWER:   a
RATIONALE:   Gathering revenue, social and economic goals are all rationales of the levy regulation.
POINTS:   1
DIFFICULTY:   Easy
QUESTION TYPE:   Multiple Selection
HAS ATTRIBUTES:   False
OBJECTIVES:   RTP.WABG.16.LO:1-01 – LO:1-01
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
STATE STANDARDS:   United States – AK – AICPA: FN-Reporting
KEY PHRASES:   Bloom’s: Knowledge
DATE PRODUCED:   9/2/2015 1:33 PM
DATE CHANGED:   9/2/2015 1:33 PM
QUESTION ID:   JFND-GO4G-EPNW-CPKG
QUESTION GLOBAL ID:   GCID-E7BW-1TBP-CCAD-1QJI-GO5U-Q3J1-GO41-4A3A-GWH1-4ATT-GR4N-4QBI-8R3N-4PBT-GTUD-GCDB-C3DI-GWN8-EPRW-EMMN-CW3S-NAMG-GFUD-Y3JA-GYSU-QCB1-CESS-CP5R-GOSU-EC3S-GWSS-KCTZ-CO3D-1P3I-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE

7. A business firm is a reporting body but not a levy-paying body.
a.  True
b.  False
ANSWER:   False
RATIONALE:   A business firm is obligated to income levy and must report earnings each year.
POINTS:   1
DIFFICULTY:   Easy
QUESTION TYPE:   True or False
HAS ATTRIBUTES:   False
OBJECTIVES:   RTP.WABG.16.LO:1-02 – LO:1-02
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
STATE STANDARDS:   United States – AK – AICPA: FN-Reporting
KEY PHRASES:   Bloom’s: Knowledge
DATE PRODUCED:   9/2/2015 1:33 PM
DATE CHANGED:   9/2/2015 1:33 PM
QUESTION ID:   JFND-GO4G-EPNW-CTBO
QUESTION GLOBAL ID:   GCID-E7BW-1TBP-CCAD-1QJI-GO5U-Q3J1-GO41-4A3A-GWH1-4ATT-GR4N-4QBI-8R3N-4PBT-GTUD-GCDB-C3DI-GWN8-EPRW-EMMB-GO3D-YCDG-GTUD-NQJU-GWSU-YA3A-CESS-ECBU-GOSU-QQJU-8YSU-YPJ3-GITU-RCBA-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE

8. Association capital profits and losses are separated individually among each of the fellows.
a.  True
b.  False
ANSWER:   True
POINTS:   1
DIFFICULTY:   Easy
QUESTION TYPE:   True or False
HAS ATTRIBUTES:   False
OBJECTIVES:   RTP.WABG.16.LO:1-02 – LO:1-02
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
STATE STANDARDS:   United States – AK – AICPA: FN-Reporting
KEY PHRASES:   Bloom’s: Knowledge
DATE PRODUCED:   9/2/2015 1:33 PM
DATE CHANGED:   9/2/2015 1:33 PM
QUESTION ID:   JFND-GO4G-EPNW-CTBZ
QUESTION GLOBAL ID:   GCID-E7BW-1TBP-CCAD-1QJI-GO5U-Q3J1-GO41-4A3A-GWH1-4ATT-GR4N-4QBI-8R3N-4PBT-GTUD-GCDB-C3DI-GWN8-EPRW-EMJO-GJOU-1AMG-GW4U-Y3MG-GWSS-KP31-CESU-QP3A-GOSS-RQBZ-GOSS-NQJT-GH3S-EAMB-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE

9. Wesley possesses and functions the Cheshire Chicken Ranch in Turpid, Nevada. The revenue from this ranch is $49,000. Wesley wishes to use the simplest feasible levy form. He may present:
a.  Form 1040EZ
b.  Form 1040A
c.  Form 1040
d.  Form 1065
e.  None from the above
ANSWER:   c
RATIONALE:   Self-employed taxpayers are not permitted to present using Form 1040-EZ of Form 1040A.
POINTS:   1
DIFFICULTY:   Moderate
QUESTION TYPE:   Multiple Selection
HAS ATTRIBUTES:   False
OBJECTIVES:   RTP.WABG.16.LO:1-02 – LO:1-02
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
STATE STANDARDS:   United States – AK – AICPA: FN-Reporting
KEY PHRASES:   Bloom’s: Knowledge
DATE PRODUCED:   9/2/2015 1:33 PM
DATE CHANGED:   9/2/2015 1:33 PM
QUESTION ID:   JFND-GO4G-EPNW-CC3S
QUESTION GLOBAL ID:   GCID-E7BW-1TBP-CCAD-1QJI-GO5U-Q3J1-GO41-4A3A-GWH1-4ATT-GR4N-4QBI-8R3N-4PBT-GTUD-GCDB-C3DI-GWN8-EPRW-EMJ1-GA3U-YAJ3-CW3U-YPJI-GRSU-YPUD-8RSU-KC33-GOSS-NC5D-CRSS-GCJW-8FOU-EAJW-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE

10. Which of the following forms may be submitted by individual taxpayers?
a.  Form 1040
b.  Form 1041
c.  Form 1065
d.  Form 1120
e.  None of the above
ANSWER:   a
RATIONALE:   Form 1041 is for trusts, Form 1065 is for partnerships, and Form 1120 is for corporations.
POINTS:   1
DIFFICULTY:   Easy
QUESTION TYPE:   Multiple Selection
HAS ATTRIBUTES:   False
OBJECTIVES:   RTP.WABG.16.LO:1-02 – LO:1-02
NATIONAL STANDARDS:   United States – BUSPROG: Analytic
STATE STANDARDS:   United States – AK – AICPA: FN-Reporting
KEY PHRASES:   Bloom’s: Knowledge
DATE PRODUCED:   9/2/2015 1:33 PM
DATE CHANGED:   9/2/2015 1:33 PM
QUESTION ID:   JFND-GO4G-EPNW-CC3I
QUESTION GLOBAL ID:   GCID-E7BW-1TBP-CCAD-1QJI-GO5U-Q3J1-GO41-4A3A-GWH1-4ATT-GR4N-4QBI-8R3N-4PBT-GTUD-GCDB-C3DI-GWN8-EPRW-EMJ1-G3OS-RQBT-GO3U-KPDB-CASU-G3MD-8RSU-EPJ1-GOSS-CPTA-GHSU-CPMR-8YHU-KCBZ-E7JI-YT4D-JFNN-4OTI-GO4W-NQNBEE

11. Concerning partnerships:
a.  Are not taxpaying entities.
b.  Are taxed similarly to individuals.
c.  Present levy returns on Form 1120.
d.  Present levy returns on Form 1041.
ANSWER:   a
RATIONALE:   Partnerships are reporting entities but not taxable entities