KU ACCT 330 EXAM 1
Tax evasion - ANSWERS-illegal means of reducing taxes
How do you evade taxes - ANSWERS--intentionally misreporting or
not reporting in order to defraud the tax authority
-punishable
What makes tax planning possible - ANSWERS-tax system has rules
in place that apply differently to different transactions and activities
What do tax consequences of transactions depend on - ANSWERS--
Entity
-Time Period
-Jurisdiction
-Character
How does the entity affect tax consequences - ANSWERS-different
companies may be taxed differently
how does time affect tax consequences - ANSWERS-the periods the
transaction takes place
how does jurisdiction affect tax consequences - ANSWERS-certain
areas have different tax laws
,how does character affect tax consequences - ANSWERS-what was
the nature of the transaction
Tax paying entity - ANSWERS--Individuals
-C Corp (double taxation)
Flow-through entity - ANSWERS--sole proprietorship
-S corp
-Partnerships
-LLCs
what is a flow through entity - ANSWERS-where income flows
through to the owners and investors
How do you calculate the tax base for entities - ANSWERS-
calculation is the SAME for all entities
How is tax planning through the entity possible - ANSWERS-because
of the difference in rates that entities are charged
Why is time important to tax consequences - ANSWERS--tax law and
MTR changes over time
-Time value of money
-Rate
, -Law
-Opportunity Cost
why is jurisdiction important to tax consequences - ANSWERS-
systems vary across states and countries
-opportunities to take advantage of different tax rates AND bases
Why is character important to tax consequences - ANSWERS--of the
INCOME
-determined by law
-income and losses are taxable or nontaxable
What types of income are taxable - ANSWERS--ordinary income
(loss)
-capital gains (loss)
What is NOT a capital asset - ANSWERS--anything used in the
ordinary course of business
-ordinary income
-taxed at regular, individual, or corporate rate
examples of NON-capital assets - ANSWERS--inventory, anything
for sale
-depreciable property
-AR/NR
Tax evasion - ANSWERS-illegal means of reducing taxes
How do you evade taxes - ANSWERS--intentionally misreporting or
not reporting in order to defraud the tax authority
-punishable
What makes tax planning possible - ANSWERS-tax system has rules
in place that apply differently to different transactions and activities
What do tax consequences of transactions depend on - ANSWERS--
Entity
-Time Period
-Jurisdiction
-Character
How does the entity affect tax consequences - ANSWERS-different
companies may be taxed differently
how does time affect tax consequences - ANSWERS-the periods the
transaction takes place
how does jurisdiction affect tax consequences - ANSWERS-certain
areas have different tax laws
,how does character affect tax consequences - ANSWERS-what was
the nature of the transaction
Tax paying entity - ANSWERS--Individuals
-C Corp (double taxation)
Flow-through entity - ANSWERS--sole proprietorship
-S corp
-Partnerships
-LLCs
what is a flow through entity - ANSWERS-where income flows
through to the owners and investors
How do you calculate the tax base for entities - ANSWERS-
calculation is the SAME for all entities
How is tax planning through the entity possible - ANSWERS-because
of the difference in rates that entities are charged
Why is time important to tax consequences - ANSWERS--tax law and
MTR changes over time
-Time value of money
-Rate
, -Law
-Opportunity Cost
why is jurisdiction important to tax consequences - ANSWERS-
systems vary across states and countries
-opportunities to take advantage of different tax rates AND bases
Why is character important to tax consequences - ANSWERS--of the
INCOME
-determined by law
-income and losses are taxable or nontaxable
What types of income are taxable - ANSWERS--ordinary income
(loss)
-capital gains (loss)
What is NOT a capital asset - ANSWERS--anything used in the
ordinary course of business
-ordinary income
-taxed at regular, individual, or corporate rate
examples of NON-capital assets - ANSWERS--inventory, anything
for sale
-depreciable property
-AR/NR
