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Exam 1: Introduction to Taxation

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Question 1

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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

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Question 2

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The objective of pay-as-you-go paygo) is to improve administrative feasibility.

A) True
B) False

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Question 3

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A fixture will be subject to the ad valorem tax on personalty rather than the ad valorem tax on realty.

What might cause an individual to owe income taxes in more than one state?

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.

Which, if any, of the following transactions will increase a taxing jurisdiction's revenue from the ad valorem tax imposed on real estate?

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.

In 2018, José, a widower, sells land fair market value of $100,000) to his daughter, Linda, for $50,000.José has not made a taxable gift.

Which, if any, of the following provisions of the tax law cannot be justified as promoting administrative feasibility simplifying the task of the IRS) ?

No state has offered an income tax amnesty program more than once.

Taylor, a widow, makes cash gifts to her five married children including their spouses) and to her seven grandchildren.What is the maximum amount Taylor can give for calendar year 2018 without using her unified transfer tax credit?

Currently, the tax base for the Social Security component of the FICA is not limited to a dollar amount.

One of the major reasons for the enactment of the Federal estate tax was to prevent large amounts of wealth from being accumulated within the family unit.

In cases of doubt, courts have held that tax relief provisions should be broadly construed in favor of taxpayers.

The Federal income tax is based on a pay-as-you-go system and has become a "mass tax." Explain this statement.

Paige is the sole shareholder of Citron Corporation.During the year, Paige leases a building to Citron for a monthly rental of $80,000.If the fair rental value of the building is $60,000, what are the income tax consequences to the parties involved?

Which, if any, of the following transactions will decrease a taxing jurisdiction's ad valorem tax revenue imposed on real estate?

The annual exclusion, currently $15,000, is available for gift and estate tax purposes.

Allowing a tax credit for certain solar energy property can be justified:

Which, if any, of the following provisions cannot be justified as mitigating the effect of the annual accounting period concept?