Test Bank For South-Western Federal Taxation 2022 Corporations, Partnerships, Estates and Trusts, 45th Edition by William A. Raabe, James C. Young , Annette Nellen , William H. Hoffman

TEST BANK FOR
South-Western Federal Taxation 2022 Corporations, Partnerships, Estates and
Trusts, 45th Edition Chapter 1-20
Answers are at the end of each chapter




Name: Class: Date:

chapter 1



Indicate whether the statement is true or false.

1. The Golsen rule no longer applies to the U.S. Tax Court.
a. True
b. False

2. Internal Revenue Code Section 318, which deals with the definition of related parties with respect to stock redemptions,
includes brothers and sisters in the related-party definition.
a. True
b. False

3. ―Legislative" regulations carry more weight than ―interpretative‖ regulations.
a. True
b. False

4. A Revenue Ruling is a legislative source of Federal tax law.
a. True
b. False

5. A jury trial is available when a case is heard by a U.S. Court of Appeals.
a. True
b. False

6. Complete avoidance of a capital gain tax occurs when the owner of appreciated property transfers it by death.
a. True
b. False

7. The taxation part of the CPA exam (REG) is now one-third essay.
a. True
b. False

8. Revenue Procedures deal with the internal management practices and procedures of the IRS.

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, a. True
b. False

9. The Standard Federal Tax Reporter is published by Research Institute of America.
a. True
b. False

10. Alabama and South Carolina are community property states.
a. True
b. False

11. Determination letters usually involve proposed transactions.
a. True
b. False

12. Subchapter P refers to the subchapter in the Internal Revenue Code that deals with partners and partnerships.
a. True
b. False

13. Regulations are issued by the Treasury Department.
a. True
b. False

14. The U.S. Federal government has a provision in the Constitution that precludes deficit spending.
a. True
b. False

15. The U.S. national debt is around $11 trillion.
a. True
b. False

16. Temporary Regulations have the same authoritative value as Final Regulations for four years.
a. True
b. False

17. In a U.S. District Court, a jury can decide both questions of fact and questions of law.
a. True
b. False

18. Many states have balanced budgets because laws or constitutional amendments preclude deficit spending.
a. True
b. False

19. Letter rulings are issued by the National Office of the IRS.
a. True
b. False

20. Internal Revenue Code § 6 involves gross income and § 7 outlines itemized deductions.
a. True
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, b. False

21. The Federal income tax law allows a taxpayer to claim a deduction for state and local income taxes but limits all state
taxes to a maximum of $10,000.
a. True
b. False

22. Indexation of various income tax components was eliminated by the Tax Cuts and Jobs Act of 2017.
a. True
b. False

23. The encouragement of private-sector pension plans can be justified under the encouragement of certain industries.
a. True
b. False

24. These Internal Revenue Code citations are incorrect: § 212(1) and § 1221(1).
a. True
b. False

25. A change in the individual tax rate has an almost immediate impact on the economy.
a. True
b. False

26. The annual gift tax exclusion in 2020 is $15,000.
a. True
b. False

27. A U.S. District Court must abide by the precedents set by the U.S. Court of Appeals of its jurisdiction.
a. True
b. False

28. When there is a direct conflict between an Internal Revenue Code section and a treaty provision, the most recent item
takes precedence.
a. True
b. False

29. Only one judge hears a trial in a U.S. District Court.
a. True
b. False

30. One Internal Revenue Code section enables shareholders in a small business corporation to obtain an ordinary
deduction for any loss recognized on a stock investment.
a. True
b. False

31. Although a corporation is subject to a Federal income tax, a partnership is not.
a. True
b. False


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, 32. A tax bill cannot originate in the Senate Finance Committee.
a. True
b. False

33. Proposed Regulations have the force and effect of law.
a. True
b. False

34. The like-kind tax free exchange treatment is an example of the wherewithal to pay concept.
a. True
b. False

35. Revenue-neutral tax laws reduce deficits.
a. True
b. False

36. Longer class lives for depreciable property and the required use of the straight-line method of depreciation would
likely dampen the tax incentive for purchasing capital assets.
a. True
b. False

37. The Internal Revenue Code is a compilation of Federal tax legislation that appears in Title 26 of the United States
Code.
a. True
b. False

38. Regulations are arranged in a different sequence than the Internal Revenue Code.
a. True
b. False

39. When there is a direct conflict between a tax treaty and the Internal Revenue Code, the Internal Revenue Code takes
precedence.
a. True
b. False

40. Proposed Regulations are published in the Federal Register.
a. True
b. False

41. The favorable treatment of research and development expenses is one means of controlling the economy.
a. True
b. False

42. A taxpayer must pay any tax deficiency assessed by the IRS and sue for a refund to bring suit in the U.S. District
Court.
a. True
b. False

43. Taxpayers may read Committee Reports to determine the intent of Congress.

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