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Exam 1: Introduction to Taxation

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Question 21

True/False

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Even if property tax rates are not changed, the amount of ad valorem taxes imposed on realty may not remain the same.

A) True
B) False

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Question 22

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Burt and Lisa are married and live in a common law state.Burt wants to make gifts to their four children in 2018.What is the maximum amount of the annual exclusion they will be allowed for these gifts?

A) $15,000.
B) $30,000.
C) $60,000.
D) $120,000.
E) None of these.

F) D) and E)
G) B) and C)

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Question 23

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What is the difference between an inheritance tax and an estate tax? Who imposes these taxes?

The tax law allows an income tax deduction or a credit) for foreign income taxes.Explain why.

Federal excise taxes that are no longer imposed include:

For Federal income tax purposes, there never has been a general amnesty period.

A provision in the law that compels accrual basis taxpayers to pay a tax on prepaid income in the year received and not when earned is consistent with generally accepted accounting principles.

As it is consistent with the wherewithal to pay concept, the tax law requires a seller to recognize gain in the year the installment sale occurs.

Under Clint's will, all of his property passes to either the Lutheran Church or to his wife.No Federal estate tax will be due on Clint's death in 2018.

State income taxes generally can be characterized by:

Ultimately, most taxes are paid by individuals.

An inheritance tax is a tax on a decedent's right to pass property at death.

Briana lives in one state and works in the adjoining state.Both states tax the income she earns from her job.Does Briana have any relief from this apparent double taxation of the same income?

Mona inherits her mother's personal residence, which she converts to a furnished rental house.These changes should affect the amount of ad valorem property taxes levied on the properties.

Taxes not imposed by the Federal government include:

Taxes levied by both states and the Federal government include:

The ad valorem tax on personal use personalty is more often avoided by taxpayers than the ad valorem tax on business use personalty.

The principal objective of the FUTA tax is to provide some measure of retirement security.

To lessen, or eliminate, the effect of multiple taxation, a taxpayer who is subject to both foreign and U.S.income taxes on the same income is allowed either a deduction or a credit for the foreign tax paid.

One of the motivations for making a gift is to save on income taxes.