ACC 455 FINAL EXAM
1. Regulations are
A. equal in authority to legislation if interpretative
B. equal in authority to legislation if statutory
C. equal in authority to legislation
D. presumed to be valid & to have almost the same weight as the IRC
2) Identify which of the following statements is false.
A. All are false.
B. Members from both the House & the Senate are on the Conference Committee.
C. When tax advisors speak of the tax law, they usually have in mind just the Internal Revenue Code.
D. Records of committee hearings are helpful in determining Congressional intent.
3) Which of the following statements regarding proposed regulations is not correct?
A. Proposed regulations do not provide any insight into the IRS's interpretation of the tax law.
B. Practitioners & other interested parties may comment on proposed regulations.
C. Proposed regulations expire after 3 years.
, A. Proposed regulations do not provide any insight into the IRS's interpretation of the tax law.
D. Proposed & temporary regulations are generally issued simultaneously.
4) Which of the following statements about a partnership is true?
A. Partners are considered employees of the partnership.
B. Partners are taxed on distributions from a partnership.
C. A partnership is a taxpaying entity.
D. Partners are taxed on their allocable share of income whether it is distributed or not.
5) Which of the following is an advantage of a sole proprietorship over other business forms?
A. Ease of formation
B. The deduction for compensation paid to the owner
C. Tax-exempt treatment of fringe benefits
D. Low tax rates on dividends
6) Which of the following statements is incorrect?
, A. S corporation losses can offset shareholder income from other sources.
B. The number of S corporation shareholders is unlimited.
C. S corporations must allocate income & expenses to their shareholders based on their proportionate ownership interest.
D. S corporation income is taxed to shareholders when earned.
7) Three members form an LLC in the current year. Which of the following statements is incorrect?
A. If the LLC elects to use its default classification, it can elect to change its status to being taxed as a C corporation beginning with the third tax year after
the initial classification.
B. The LLC can elect to have its default classification ignored.
C. The LLC's default classification under the check-the-box rules is as a partnership.
D. The LLC can elect to be taxed as a C corporation with no special tax consequences.
8) Identify which of the following statements is true.
A. Under the check-the-box regulations, an LLC that has one member (owner) may be disregarded as an entity separate from its owner.
B. An unincorporated business may not be taxed as a corporation.
C. A new LLC that is owned by four members elects to be taxed under its default classification (as a partnership) in its first year of operations. The entity is prohibited
from changing its tax classification at any time in the future.
D. All are false.
1. Regulations are
A. equal in authority to legislation if interpretative
B. equal in authority to legislation if statutory
C. equal in authority to legislation
D. presumed to be valid & to have almost the same weight as the IRC
2) Identify which of the following statements is false.
A. All are false.
B. Members from both the House & the Senate are on the Conference Committee.
C. When tax advisors speak of the tax law, they usually have in mind just the Internal Revenue Code.
D. Records of committee hearings are helpful in determining Congressional intent.
3) Which of the following statements regarding proposed regulations is not correct?
A. Proposed regulations do not provide any insight into the IRS's interpretation of the tax law.
B. Practitioners & other interested parties may comment on proposed regulations.
C. Proposed regulations expire after 3 years.
, A. Proposed regulations do not provide any insight into the IRS's interpretation of the tax law.
D. Proposed & temporary regulations are generally issued simultaneously.
4) Which of the following statements about a partnership is true?
A. Partners are considered employees of the partnership.
B. Partners are taxed on distributions from a partnership.
C. A partnership is a taxpaying entity.
D. Partners are taxed on their allocable share of income whether it is distributed or not.
5) Which of the following is an advantage of a sole proprietorship over other business forms?
A. Ease of formation
B. The deduction for compensation paid to the owner
C. Tax-exempt treatment of fringe benefits
D. Low tax rates on dividends
6) Which of the following statements is incorrect?
, A. S corporation losses can offset shareholder income from other sources.
B. The number of S corporation shareholders is unlimited.
C. S corporations must allocate income & expenses to their shareholders based on their proportionate ownership interest.
D. S corporation income is taxed to shareholders when earned.
7) Three members form an LLC in the current year. Which of the following statements is incorrect?
A. If the LLC elects to use its default classification, it can elect to change its status to being taxed as a C corporation beginning with the third tax year after
the initial classification.
B. The LLC can elect to have its default classification ignored.
C. The LLC's default classification under the check-the-box rules is as a partnership.
D. The LLC can elect to be taxed as a C corporation with no special tax consequences.
8) Identify which of the following statements is true.
A. Under the check-the-box regulations, an LLC that has one member (owner) may be disregarded as an entity separate from its owner.
B. An unincorporated business may not be taxed as a corporation.
C. A new LLC that is owned by four members elects to be taxed under its default classification (as a partnership) in its first year of operations. The entity is prohibited
from changing its tax classification at any time in the future.
D. All are false.
