Multiple Choice 5 pts. each
1. Which of the following would be considered substantial authority for the assessment of additional tax under IRC § 6662?
2. What are pitfalls in interpreting the Internal Revenue Code?
3. In § 212(1), the number (1) stands for the _____.
4. Which item is not considered regulatory tax authority?
5. A taxpayer who loses in a U.S. District Court may appeal directly to the____.
6. A taxpayer may not appeal a case from which court?
7. Cash received by an individual _____
8. Which of the following is a taxable disposition (or are taxable dispositions) of an installment obligation?
9. Which of the following statements regarding a 52–53-week tax year is correct?
10. A C corporation is required to annualize its income _____.
11. William sold a capital asset on the installment basis and did not charge interest on the deferred payment due in 3 years. Which of the following is true?
12. The installment method can be applied to the following.
13. Which of the following is excludable from wage and salary taxable income?
14. Which of the following is not excludable from wage and salary taxable income?
15. Which of the following is not excludable from wage and salary taxable income?
16. Which of the following are not exclusions from taxable income?
True/False 5 pts. each
17. De minimis fringe benefits are those that are so immaterial that accounting for them is impractical.
18. De minimis fringe benefits are subject to strict antidiscrimination requirements.
19. True or False: In the case of a fringe benefit plan that is discriminatory (e.g., the plan favors officers over other employees), De minimis fringes may be excluded from gross income.
20. True or False:
In the case of an accrual basis taxpayer, an item of income is recognized when all the events have occurred to fix the taxpayer's right to receive the income and the amount of the income can be determined with reasonable accuracy.
Short Answer 10 pts. Each
21. What are Adam Smith’s 4 Canons of Taxation?
22. What are the forms of Progressive Taxes?
23. What are some characteristics of a National Sales Tax?
24. What are the Deductions FOR AGI?
25. What is the role of the Senate Finance Committee in tax legislative process?
Yes/No 5 points each
26. Would you include inheritance of $75,000 in the calculation of AGI?
27. Would you include Child Support in the calculation of AGI? Explain
28. Would you include loan proceeds in the calc. of AGI? Explain
29. Would you include a gift the calc. of AGI? Explain
30. Would you interest income on municipal bonds in the calc. of AGI?
31. Would you include damages from personal injury in the calc. of AGI?
32. Would you include punitive damages in the calc. of AGI?
Problems 5 points each
33. Calculate AGI based on the following:
Gross income of $50,000.
Charitable contributions $2,000
Contribution to a traditional IRA $3,000
Expenses paid on rental property$5,000
Interest and taxes on personal residence $7,000
State income tax $1,200
34. How much can a taxpayer who operates a laundry business deduct for the following expenses during the year?
•Parking ticket of $100 for one of his delivery vans that parked illegally
•Parking ticket of $50 when he parked illegally while attending a rock concert in Tulsa
•DUI ticket of $400 while returning from the rock concert
•Attorney's fee of $500 associated with the DUI ticket
35. Calculate basis of machine for cost recovery based on the following:
On June 1 of the current year, Taxpayer converted a machine to rental property. At the time of the conversion, the machine was worth $90,000. Five years ago, Taxpayer purchased the machine for $120,000. The machine is still encumbered by a $50,000 mortgage. What is the basis of the machine for cost recovery?