Tax Exam 1 (chpater 1,2,3,8)

What is the standard deduction for an Individual in 2019

$12,200

Paul makes the following property transfers in the current year: -$22,000 cash to his wife -$34,000 cash to a qualified charity -$220,000 house to his son -$3,000 computer to an unrelated friend The total of Paul's taxable gifts, assuming he does not elect gift splitting with his spouse, subject to the unified transfer tax is A. $205,000 B.$212,000 C. $245,000 D. $279,000

A. $205,000

Briana, who is single, has taxable income for 2019 of $90,000, resulting in a total tax of $15,775. Her total economic income is $100,000. Briana's average tax rate and effective tax rate are, respectively. A. 17.53% and 15.7% B.17.53% and 24% C. 15.78 and 24% D. 15.78 and 17.53%

A. 17.53% and 15.7%

Horizontal Equity means that A. Taxpayers with the same amount of income should pay the same amount of tax B. taxpayers with larger amounts of income should pay more tax than taxpayers with lower amounts of income C. all taxpayers should pay the same tax

A. Tax payers with the same amount of income should pay the same amount of tax

Which of the following bonds do Not generate tax- exempt income for federal income tax purposes? A. U.S Treasury Bonds B. bonds issued by fire districts C. School district bonds D. Bonds issued by cities

A. U.S treasury bonds

Charlie makes the following gifts in the current year: $40,000 to his spouse, $30,000 to his church, $18,000 to his nephew, and $25,000 to a friend. Assuming charlie does not elect gift splitting with his wife, his taxable gifts in the current year will be A. $28,000 B. $13,000 C. $25,000 D. $43,000

B. $13,000

Eric dies in the current year and has a gross estate valued at $16,500,000. the estate incurs funeral and administrative expenses of $100,000 and also pays of Eric's debts which amount to $250,000. Eric bequeaths $600,000 to his wife. Eric made no taxable transfers during his life. Eric's' taxable estate will be A. $4,250,000 B. $15,550,000 C. $4,150,000 D. $16,500,000

B. $15,550,000

AB Partnership earns $500,000 in the current year. Partner A and B are equal partners who do not receive any distributions during the year. How much income does Partner A report from the partnership? A. $0 B. $250,000 C. $500,000 D. None of the Above

B. $250,000

When property is transferred, the gift tax is based on A. Replacement cost of the transferred property B. fair market value on the date of transfer C. The transferor's original cost of the transferred property D. The transferor's depreciated cost of the transferred property

B. Fair Market value on the date of transfer

Arhur pays tax of $5,000 on taxable income of $50,000 while taxpayer Barbara pays tax of $12,000 on $120,000. The tax is a: A. Progressive Tax B. Flat Tax C. Regressive Tax

B. Flat Tax

The unified transfer tax system A. imposes a single tax upon transfers of property during an individual's lifetime only. B. imposes a single tax upon transfers of property during an individual's life and at death C. Imposes a single tax upon transfers of property only at an individual's death

B. Imposes a single tax upon transfers of property during an individual's life and at death

which of the following is NOT a taxpaying entity? A. C corporation B. Partnership C. Individual D. All of above are taxpayers

B. Partnership

Which of the following is NOT an objective of the federal income tax law? A. Stimulate private investment B. Redistribution of wealth C. encourage research and development activities D. Prevent taxpayers from paying higher percentage of their income in personal income taxes due to inflation

B. Redistribution of Wealth

While using a metal detector at the beach during spring break, Toni uncovered some rare coins with a current fair market value of $9,000. What are her tax consequences regarding this find? A. Because it was a "find" she only reports half of the FMV as income B. She reports the entire FMV as income C. since she "found the coins, she does not have to report any amount of income until she sells the coins D. under the discovery rules in the tax law, she will never report any amount as taxable since the value is under $10,000

B. She reports the entire FMV as income

Sarah contributes $25,000 to a church. Sarah's marginal tax rate is 35% while her average tax rate is 25%. after considering her tax savings, Sarah's contribution costs A. $6,250 B. $8,750 C. $16,250 D. $18,750

C. $16,250

Which of the following items is NOT considered gross income fro tax purposes ? A. gambling winnings B. illegal income C. Face amount of life insurance received due to the death of the insured D. Cash dividends

C. Face amount of life insurance received due to the death of the insured

Until about 100 years ago, attempts to impose a federal income tax were ruled unconstitutional. The amendment t the U.S Constitution allowing the imposition of a federal income tax is the: A. Second Amendment B. Thirteenth Amendment C. sixteenth Amendment D. Nineteenth Amendment

C. Sixteenth Amendment

Which of the following statements is incorrect? A. Property taxes are levied on real estate B. Excise taxes are aassessed on items such as gasoline and telephone use C. Gift taxes are imposed on the recipient of a gift D. The estate ax is based on the fair market value of property of death of the alternate valuation date

C. gift taxes are imposed on the recipient of a gift

Norah, who gives music lessons, is a calendar- year taxpayer using the cash-basis method of accounting. On October 1 of this year, she received $1,200 for a one-year contract beginning on that date to provide 10 lessons. she gave 6 lessons this year. How much should Norah include in Income this year? A. $480 B. $360 C. $720 D. $1,200

D. $1,200

In 2019, an estate is not taxable unless the sum of the taxable estate and taxable gifts made after 1976 exceeds A. $4,505,800 B. $10,000,000 C. $5,000,000 D. $11,400,000

D. $11,400,000

Lily had the following income and losses during the current year: -salary $75,000 - Prize from quiz show : $25,000 - Unemployment Compensation : $8,000 - Embezzled Funds : $30,000 - Share of partnership income : $35,000 What is Lily's adjusted gross income A. $135,000 B. $143,000 C. $165,000 D. $173,000

D. $173,000

Which of the following is NOT an objective of the federal income tax law? A. There must be economic benefit B. Income must be realized C. Income must be recognized D. Cash must be received

D. Cash Must be received

Which of the following is NOT one of Adam Smith's canons of taxation A. Equity B. Convenience C. Certainty D. Economic Stimulation

D. Economic Stimulation

Which of the following taxes is progressive? A. sales Tax B. Excise Tax C. Property Tax D. Federal Income Tax

D. Federal income Tax

Which of the following is NOT included in gross income when received? A. interest received on bank accounts B. royalties paid to an author C. amounts received to cancel or modify a lease D. Refundable security deposit

D. Refundable security deposit

What are the side benefits you receive from a job called?

Fringe benefits

What are the 5 filing statuses possible for 2019

Married Filling jointly Married Filling Spearate Single Head of Household Widower(??)

What Section of the US Code contains the internal Revenue Code

Section 26 or somethin