Tax l: Chapter 1

Major features of conduits are:

Pass through their income to owners. Need not pay taxes.

What is the purpose of the Joint Conference Committee?

Conduct business between the houses.

Which item listed below is not a capital asset?

Depreciable property

The legislative process of a tax bill begins with the:

House Ways and Meas Committee.

Where must revenue legislation originate?

House of Representatives

What is the test which distinguishes between tax avoidance and tax evasion?

Intent, distinction between the both.

An attractive characteristic of the personal income tax is:

It has the ability to raise a considerable amount of money.

The value-added tax has great appeal to politicians because:

It has the potential to raise large sums of money.

Of what importance is the date March 1, 1913?

Normal tax and surtax approval. Personal exemptions established. Sometimes used as a basis for computing gains and losses. Federal income tax permit basis.

The Tax Reform Act of 1986:

Replaced the Internal Revenue Code of 1954 with the Internal Revenue Code of 1986.

The sixteenth Amendment granted Congress the right to:

Tax income from whatever source derived.

Which committees of Congress are responsible for revenue legislation?

Ways and Means Committee. Senate Finance Committee, goes to joint conference.