WGU C237 - Taxation 1 Questions with Correct Answers 100% Verified By Experts| 2025/2026
Latest Update
Second-highest level of legislative authority of tax? Internal Revenue Code
In which publication does the IRS provide info on tax consequences of specific transactions?
Revenue rulings
An individual is salaried, is not operating a business, is divorced with one child living at home,
earned $93,000 in wages for 2021, and has $17,900 of itemized deductions. What is this
individual's tax liability? $10,620
Which tax is based on the value of an individual's real estate? Property Tax
Flow-through entities in the U.S. tax system? Religious Associations
A taxpayer fails to report income that exceeds 25% of reported gross income but files the
return on time.How many years after a return was originally due might the statute of
limitations expire? 6 Years
Which component of a tax practice focuses on minimizing taxes paid and maximizing after-tax
cash flows while accommodating clients' other desires? Tax Planning
Which tax term defines a personal expenditure, such as charitable contributions and medical
expenses, which taxpayers may claim if they keep records? Itemized Deductions
A single individual earned wages of $50,000 working at a bank. The individual received a $6,000
gift from a parent to go to Europe, inherited $10,000 from a relative, and received $500 interest
from a municipal bond. The individual has no dependents and has itemized deductions of
$11,000. What is this individual's tax liability for 2021? $4295
, A married couple, ages 29 and 32, have normal vision and one dependent daughter who is 14
years old. During 2021, one of the individuals earned taxable wages of $54,000, and the other
earned $100,000. The couple also earned $400 of interest income from their joint savings
account, $1,200 interest from a municipal bond, and incurred $23,590 of eligible itemized
deductions. The couple will be filing a joint return. What is this couple's federal income tax?
$19,943
Which scenario represents a realization of income? A payment of $2,000 for stocks sold
Which type of income satisfies all three requirements for the income to be taxable? Renting
out a condo for $5,000
In which situation has a taxpayer actually or constructively received income that should be
included in gross income for the current year? The taxpayer went on vacation the last two
weeks of the year, and he instructed his employer to put the year-end paycheck in his locked
desk drawer at the office. The taxpayer does not return and deposit the paycheck until the
following January.
Which receipt is included in gross income for 2021? Royalties
Which source of income is included in gross income? Rental
What is it called when a person attempts to not pay federal income taxes by willfully excluding
taxable income? Tax Evasion
Difference between tax evasion and tax avoidance? tax avoidance—An action taken to
lessen tax liability and maximize after-tax income. tax evasion—The failure to pay or a
deliberate underpayment of taxes.
Which item is excluded from gross income by the Internal Revenue Code? A $200 gift from a
relative
Latest Update
Second-highest level of legislative authority of tax? Internal Revenue Code
In which publication does the IRS provide info on tax consequences of specific transactions?
Revenue rulings
An individual is salaried, is not operating a business, is divorced with one child living at home,
earned $93,000 in wages for 2021, and has $17,900 of itemized deductions. What is this
individual's tax liability? $10,620
Which tax is based on the value of an individual's real estate? Property Tax
Flow-through entities in the U.S. tax system? Religious Associations
A taxpayer fails to report income that exceeds 25% of reported gross income but files the
return on time.How many years after a return was originally due might the statute of
limitations expire? 6 Years
Which component of a tax practice focuses on minimizing taxes paid and maximizing after-tax
cash flows while accommodating clients' other desires? Tax Planning
Which tax term defines a personal expenditure, such as charitable contributions and medical
expenses, which taxpayers may claim if they keep records? Itemized Deductions
A single individual earned wages of $50,000 working at a bank. The individual received a $6,000
gift from a parent to go to Europe, inherited $10,000 from a relative, and received $500 interest
from a municipal bond. The individual has no dependents and has itemized deductions of
$11,000. What is this individual's tax liability for 2021? $4295
, A married couple, ages 29 and 32, have normal vision and one dependent daughter who is 14
years old. During 2021, one of the individuals earned taxable wages of $54,000, and the other
earned $100,000. The couple also earned $400 of interest income from their joint savings
account, $1,200 interest from a municipal bond, and incurred $23,590 of eligible itemized
deductions. The couple will be filing a joint return. What is this couple's federal income tax?
$19,943
Which scenario represents a realization of income? A payment of $2,000 for stocks sold
Which type of income satisfies all three requirements for the income to be taxable? Renting
out a condo for $5,000
In which situation has a taxpayer actually or constructively received income that should be
included in gross income for the current year? The taxpayer went on vacation the last two
weeks of the year, and he instructed his employer to put the year-end paycheck in his locked
desk drawer at the office. The taxpayer does not return and deposit the paycheck until the
following January.
Which receipt is included in gross income for 2021? Royalties
Which source of income is included in gross income? Rental
What is it called when a person attempts to not pay federal income taxes by willfully excluding
taxable income? Tax Evasion
Difference between tax evasion and tax avoidance? tax avoidance—An action taken to
lessen tax liability and maximize after-tax income. tax evasion—The failure to pay or a
deliberate underpayment of taxes.
Which item is excluded from gross income by the Internal Revenue Code? A $200 gift from a
relative
