ACC331 Federal Taxation – Final
Exam 8-1
When the Tax Court follows the opinion of the circuit court of appeals to which the case is appealable, the
court is following the
A.
Forum shopping rule.
B.
Conformity rule.
C.
Golsen rule.
D.
Acquiescence rule.
You have the following citation: Joel Munro, 92 T.C. 71 (1989). Which of the following statements is
true?
A.
This citation refers to a taxpayer conference between the IRS and the taxpayer.
B.
The taxpayer, Joel Munro, won the case because there is no reference to the IRS.
C.
The case appears on page 71 in Volume 92 of the official Tax Court of the United States Reports and the
case was decided in 1989.
D.
The case was tried in 1989 and was appealed in 1992.
Which of the following statements about the Statements on Standards for Tax Services is
true?
A.
A CPA is never allowed to use a taxpayer's estimates when preparing a tax return.
B.
The CPA should not recommend that a taxpayer take a certain position if there is any doubt as to whether
the position would be approved by the IRS upon audit.
C.
The CPA may in good faith rely on information provided by the taxpayer, without verifying the reliability of
that information if reasonable inquiries are made where the information furnished appears to be incorrect.
D.
The CPA must tell the IRS upon becoming aware that an error has been made on a past tax return.
, A client wants to take a tax return position with less than a 10% probability of being upheld in court. The
CPA should
A.
take the client's desired position and sign the return as usual.
B.
inform the client that the position does not have a realistic possibility of success.
C.
ask the client to sign a waiver of his right to sue the CPA in the event the IRS disallows the position.
D.
take the client's desired position, but not sign the tax return.
Identify which of the following statements is false.
A.
A sole proprietorship is a separate taxable entity.
B.
A solely owned corporation is a sole proprietorship.
C.
A sole proprietor is considered to be an employee of the business.
D.
All of the above are false.
A corporation must recognize a loss when transferring noncash boot property that has declined in value
and its stock to a transferor as part of a Sec. 351 exchange.
True
False
The City of Portland gives Data Corporation $60,000 cash and land worth $100,000 to induce it to move.
The cash was not spent during the 12 months following contribution. The contribution results in
A.
income recognition in the amount of $160,000 to the corporation at the time of contribution.
B.
income recognition in the amount of $60,000 to the corporation 12 months after the time of contribution.
C.
a zero basis in the land and a $60,000 basis reduction in other assets.
D.
Exam 8-1
When the Tax Court follows the opinion of the circuit court of appeals to which the case is appealable, the
court is following the
A.
Forum shopping rule.
B.
Conformity rule.
C.
Golsen rule.
D.
Acquiescence rule.
You have the following citation: Joel Munro, 92 T.C. 71 (1989). Which of the following statements is
true?
A.
This citation refers to a taxpayer conference between the IRS and the taxpayer.
B.
The taxpayer, Joel Munro, won the case because there is no reference to the IRS.
C.
The case appears on page 71 in Volume 92 of the official Tax Court of the United States Reports and the
case was decided in 1989.
D.
The case was tried in 1989 and was appealed in 1992.
Which of the following statements about the Statements on Standards for Tax Services is
true?
A.
A CPA is never allowed to use a taxpayer's estimates when preparing a tax return.
B.
The CPA should not recommend that a taxpayer take a certain position if there is any doubt as to whether
the position would be approved by the IRS upon audit.
C.
The CPA may in good faith rely on information provided by the taxpayer, without verifying the reliability of
that information if reasonable inquiries are made where the information furnished appears to be incorrect.
D.
The CPA must tell the IRS upon becoming aware that an error has been made on a past tax return.
, A client wants to take a tax return position with less than a 10% probability of being upheld in court. The
CPA should
A.
take the client's desired position and sign the return as usual.
B.
inform the client that the position does not have a realistic possibility of success.
C.
ask the client to sign a waiver of his right to sue the CPA in the event the IRS disallows the position.
D.
take the client's desired position, but not sign the tax return.
Identify which of the following statements is false.
A.
A sole proprietorship is a separate taxable entity.
B.
A solely owned corporation is a sole proprietorship.
C.
A sole proprietor is considered to be an employee of the business.
D.
All of the above are false.
A corporation must recognize a loss when transferring noncash boot property that has declined in value
and its stock to a transferor as part of a Sec. 351 exchange.
True
False
The City of Portland gives Data Corporation $60,000 cash and land worth $100,000 to induce it to move.
The cash was not spent during the 12 months following contribution. The contribution results in
A.
income recognition in the amount of $160,000 to the corporation at the time of contribution.
B.
income recognition in the amount of $60,000 to the corporation 12 months after the time of contribution.
C.
a zero basis in the land and a $60,000 basis reduction in other assets.
D.
