Page 1 of 23
WGU C239 PA MOST COMPREHENSIVE 2026 QUESTIONS
EXAM LATEST VERSION SOLVED QUESTIONS & ANSWERS
VERIFIED 100 %
An individual has taxable income of $60,000. The first $20,000 is taxed at 20%,
the next $20,000 is taxed at 20%, and all income above $40,000 is taxed at
20%.Which tax structure is being applied to the individual's taxable income?
Base
Regressive
Progressive
Proportional
Proportional
Which federal income tax structure imposes an increasing marginal tax rate as
the tax base increases?
Regressive tax
Incremental tax
Progressive tax
Proportional tax
Progressive
What would a graph look like for Progressive, Proportional, Incremental, and
Regressive tax structures?
Progressive- ascending
Proportional- flat line
Incremental- stair-steps
Regressive- descending
What describes a gift tax?
Tax on the retail sale of particular products
Tax on the fair market value of wealth transfers
, Page 2 of 23
Tax on the retail price of goods and services
Tax on income earned by an individual
Tax on the fair market value of wealth transfers
What is a key element of an economy tax structure?
Attracts and stimulates investment
Helps ensure equality and ability to pay
Assists in reducing unemployment and inflation
Requires minimal compliance and administration costs
Requires minimal compliance and administration costs
Which objective of the federal tax law requires that a good tax system
minimizes the compliance and administration costs?
Equity
Convenience
Certainty
Economy
Economy
Consider how the tax burden should be distributed across taxpayers
Questions of Equity
Means taxpayers should be able to determine when, where, and how much to
pay
Certainty
A tax system should minimize compliance and administration costs
Convenience
Which partnership item would flow through to an individual's tax return?
Capital gains
Gross income
Partnership exemptions
Dividends received deduction
Capital Gains
An Eleventh Circuit client who files in the U.S. Court of Federal Claims wants
to know whether to include the terms of multiple options to renew a sale-
leaseback to calculate a deduction.
What is the authoritative reference?
, Page 3 of 23
A Second Circuit case which used disjunctive analysis
A tax court decision which used economic substance
An Eleventh Circuit Case which analyzed sale-leaseback transactions that
generate tax deductions
A U.S. Court of Federal Claims case which analyzed sale-leaseback
transactions for operating equipment
A U.S. Court of Federal Claims case which analyzed sale-leaseback transactions for
operating equipment
Which tax rate calculation is an appropriate step in tax planning strategy to
reduce tax?
The average tax rate, because it represents the percent of tax on each dollar
The tax-exempt tax rate, because effective tax planning utilizes tax exempt
bonds
The effective tax rate, because economic income is less broad than taxable
income
The marginal tax rate, because it represents the tax applicable to the next
taxable dollar
The marginal tax rate, because it represents the tax applicable to the next taxable
dollar
Where is a corporation's non-business income allocated when computing the
corporation's state taxable income?
To multiple states per the functional test
To one state per the transaction test
To the state of the corporate headquarters of the payer
To each state where the income is earned
To the state of the corporate headquarters of the payer
What is a key operating element of doing business as an S corporation?
Fiscal year ends can be chosen without establishing a business purpose.
Corporate profits are taxed at the shareholders level in the year earned.
Shareholders are not subject to the at-risk or passive activity limitations.
WGU C239 PA MOST COMPREHENSIVE 2026 QUESTIONS
EXAM LATEST VERSION SOLVED QUESTIONS & ANSWERS
VERIFIED 100 %
An individual has taxable income of $60,000. The first $20,000 is taxed at 20%,
the next $20,000 is taxed at 20%, and all income above $40,000 is taxed at
20%.Which tax structure is being applied to the individual's taxable income?
Base
Regressive
Progressive
Proportional
Proportional
Which federal income tax structure imposes an increasing marginal tax rate as
the tax base increases?
Regressive tax
Incremental tax
Progressive tax
Proportional tax
Progressive
What would a graph look like for Progressive, Proportional, Incremental, and
Regressive tax structures?
Progressive- ascending
Proportional- flat line
Incremental- stair-steps
Regressive- descending
What describes a gift tax?
Tax on the retail sale of particular products
Tax on the fair market value of wealth transfers
, Page 2 of 23
Tax on the retail price of goods and services
Tax on income earned by an individual
Tax on the fair market value of wealth transfers
What is a key element of an economy tax structure?
Attracts and stimulates investment
Helps ensure equality and ability to pay
Assists in reducing unemployment and inflation
Requires minimal compliance and administration costs
Requires minimal compliance and administration costs
Which objective of the federal tax law requires that a good tax system
minimizes the compliance and administration costs?
Equity
Convenience
Certainty
Economy
Economy
Consider how the tax burden should be distributed across taxpayers
Questions of Equity
Means taxpayers should be able to determine when, where, and how much to
pay
Certainty
A tax system should minimize compliance and administration costs
Convenience
Which partnership item would flow through to an individual's tax return?
Capital gains
Gross income
Partnership exemptions
Dividends received deduction
Capital Gains
An Eleventh Circuit client who files in the U.S. Court of Federal Claims wants
to know whether to include the terms of multiple options to renew a sale-
leaseback to calculate a deduction.
What is the authoritative reference?
, Page 3 of 23
A Second Circuit case which used disjunctive analysis
A tax court decision which used economic substance
An Eleventh Circuit Case which analyzed sale-leaseback transactions that
generate tax deductions
A U.S. Court of Federal Claims case which analyzed sale-leaseback
transactions for operating equipment
A U.S. Court of Federal Claims case which analyzed sale-leaseback transactions for
operating equipment
Which tax rate calculation is an appropriate step in tax planning strategy to
reduce tax?
The average tax rate, because it represents the percent of tax on each dollar
The tax-exempt tax rate, because effective tax planning utilizes tax exempt
bonds
The effective tax rate, because economic income is less broad than taxable
income
The marginal tax rate, because it represents the tax applicable to the next
taxable dollar
The marginal tax rate, because it represents the tax applicable to the next taxable
dollar
Where is a corporation's non-business income allocated when computing the
corporation's state taxable income?
To multiple states per the functional test
To one state per the transaction test
To the state of the corporate headquarters of the payer
To each state where the income is earned
To the state of the corporate headquarters of the payer
What is a key operating element of doing business as an S corporation?
Fiscal year ends can be chosen without establishing a business purpose.
Corporate profits are taxed at the shareholders level in the year earned.
Shareholders are not subject to the at-risk or passive activity limitations.
