federal tax accounting multiple choice questions

federal tax accounting multiple choice questions

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1. 
(TCO 1) Which, if any, of the following would tend to decrease the ad valorem tax on real estate?
 (Points 
: 2) 
       
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
2. 
(TCO 1) Which, if any, of the following is a typical characteristic of an ad valorem tax on personality?
(Points : 2) 
       
Taxpayer compliance is greater for personal use property than for business use property.
       
The tax on automobiles sometimes considers the age of the vehicle.
       
Most states impose a tax on intangibles.
       
The tax on intangibles generates considerable revenue since it is difficult for taxpayers to avoid.
       
None of the above
3. 
(TCO 1) Both economic and social considerations can be used to justify:
 (Points : 2) 
       
various tax credits, deductions, and exclusions that are designed to encourage taxpayers to obtain
additional education.
       
disallowance of any deduction for expenditures deemed to be contrary to public policy (e.g., fines,
penalties, illegal kickbacks, bribes to government officials).
       
favorable tax treatment for accident and health plans provided for employees and financed by
employers.
       
allowance of a deduction for state and local income taxes paid.
       
None of the above
4. 
(TCO 8) Allowing excess capital losses to be carried over to other years can be justified:
 (Points : 2) 
       
on political considerations.
       
as mitigating the effect of the annual accounting period concept.
       
by social considerations.
       
as promoting administrative feasibility.
       
None of the above
5. 
(TCO 8) During 2011, Marie had the following transactions:
Salary: $40,000
Bank loan (proceeds used to buy personal auto): $10,000
Inheritance from deceased aunt: $50,000
Alimony received: $6,000
Child support received: $12,000
Marie’s AGI is:
 (Points : 2) 
       
$40,000.
       
$46,000.
       
$52,000.
       
$96,000.

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None of the above
6. 
(TCO 8) Elton and Elsie are husband and wife and file a joint return for 2011. Both are under 65 years
of age. They provide more than half of the support of their daughter, Kristie (age 25), who is a full-time
medical student. Kristie receives a $3,400 scholarship covering her room and board at college. They
furnish all of the support of Hattie (Elton’s grandmother), who is age 70 and lives in a nursing home. They
also support Meg (age 66), who is a friend of the family who lives with them. How many personal and
dependency exemptions may Elton and Elsie claim?
 (Points : 2) 
       
Two
       
Three
       
Four
       
Five
       
None of the above
7. 
(TCO 8) A qualifying child CANNOT include:
 (Points : 2) 
       
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.
8. 
(TCO 9) Which of the following would be considered “substantial authority” for purposes of the
accuracy-related penalty under § 6662?
 (Points : 2) 
       
General counsel memoranda
       
The Bluebook
       
Revenue ruling
       
Letter ruling
       
All of the above
9. 
(TCO 11) Which item may NOT be cited as a precedent?
 (Points : 2) 
       
Regulations
       
Temporary regulations
       
Technical advice memoranda
       
U.S. Tax Court decision
       
None of the above
10. 
(TCO 12) A taxpayer may NOT appeal a case from which court?
 (Points : 2) 
       
U.S. District Court
       
U.S. Circuit Court of Appeals
       
U.S. Court of Federal Claims
       
Small Cases Division of the U.S. Tax Court
       
None of the above

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