South-Western Federal Taxation 2025: Individual Income Taxes 48e Young – Chapter 1–20 Test Bank with Answer Key

TEST BANK FOR
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k South-Western Federal Taxation 2025: Individual Income Taxes 48e Young
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Chapter 1-20k




Chapterk 01k 2025kIndividuals
Answers Included
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Indicatek whetherk thek statementk isk truek ork false.
1.kSaleskmadekoverkthekinternetkareknotkexemptkfromkthekapplicationkofkakgeneralksalesk(orkuse)ktax.
a. True
b. False

2.kUponkauditkbykthekIRS,kFaithkiskassessedkakdeficiencykofk$40,000kofkwhichk$25,000kiskattributablektoknegligence.
Thek20%knegligencekpenaltykwillkapplyktok$25,000.
a. True
b. False

3.kUltimately,kmostktaxeskarekpaidkbykindividuals.
a. True
b. False

4.kEvenkifkpropertyktaxkrateskareknotkchanged,kthekamountkofkadkvaloremktaxeskimposedkonkrealtykmayknotkremainkt
heksame.
a. True
b. False

5.kThekprincipalkobjectivekofkthekFUTAktaxkisktokprovideksomekmeasurekofkretirementksecurity.
a. True
b. False

6.kIfkmorekIRSkauditskarekproducingkakhigherknumberkofknok changekresults,kthiskindicateskincreasedkcompliancekonkt
hekpartkofktaxpayers.
a. True
b. False

7.kAksafekandkeasykwaykforkaktaxpayerktokavoidklocalkandkstateksalesktaxeskisktokmakekthekpurchasekinkakstatekthatkl
eviesknoksuchktaxes.
a. True
b. False

8.kAkcalendarkyearktaxpayerkfileskhisk2023kFederalkincomektaxkreturnkonkMarchk4,k2024.kThekreturnkreflectskankove
rpaymentkofk$6,000,kandkthektaxpayerkrequestskakrefundkofkthiskamount.kThekrefundkiskpaidkonkMayk16,k2024.kThek
refundkneedknotkincludekinterest.
a.k True
b.kFalse

9.kAktaxkcutkenactedkbykCongresskthatkcontainskaksunsetk provisionkwillkmakekthektaxkcutktemporary.
a.k True
b.kFalse

,10.kForkFederalkincomektaxkpurposes,ktherekneverkhaskbeenkakgeneralkamnestykperiod.
a. True
b. False

11.kToklessenkorkeliminatekthekeffectkofkmultiplektaxation,kaktaxpayerkwhokisksubjectktokbothkforeignkandkU.S.kincomekt
axeskonktheksamekincomekiskallowedkeitherkakdeductionkorkakcreditkforkthekforeignktaxkpaid.
a. True
b. False

12.kBecausekitkiskconsistentkwithkthekwherewithalktokpaykconcept,kthektaxklawkrequireskaksellerktokrecognizekakgainkinkt
hekyearkthekinstallmentksalekoccurs.
a. True
b. False

13.kThekamountkofkaktaxpayer’skitemizedkdeductionskwillkincreasekthekchancekofkbeingkauditedkbykthekIRS.
a. True
b. False

14.kInk2024,kJosé,kakwidower,ksellsklandk(fairkmarketkvaluekofk$100,000)ktokhiskdaughter,kLinda,kfork$50,000.kJosékhask
notkmadekaktaxablekgift.
a. True
b. False

15.kForkomissionskfromkgrosskincomekinkexcesskofk25%kofkthatkreported,ktherekisknokstatutekofklimitationskonka
dditionalkincomektaxkassessmentskbykthekIRS.
a. True
b. False

16.kStealthktaxeskhavekthekeffectkofkgeneratingkadditionalktaxeskfromkallktaxpayers.
a. True
b. False

17.kJason’skbusinesskwarehousekiskdestroyedkbykfire.kBecausekthekinsurancekproceedskexceedkthekbasiskofkthekpropert
y,kakgainkresults.kIfkJasonkshortlykreinvestskthekproceedskinkaknewkwarehouse,knokgainkiskrecognizedkduektokthekappl
icationkofkthekwherewithalktokpaykconcept.
a. True
b. False

18.kAnkinheritancektaxkiskaktaxkonkakdecedent’skrightktokpasskpropertykatkdeath.
a.k True
b.kFalse

19.kWhenkinterestkiskchargedkonkakdeficiency,kanykpartkofkakmonthkcountskaskakfullkmonth.
a.k True
b.kFalse

,Name: Class: Date:

Chapterk01k 2025kIndividuals

20.kThekmajoritykofkIRSkauditskarekhandledkbykcorrespondence.
a. True
b. False

21.kThekratificationkofkthekSixteenthkAmendmentktokthekU.S.kConstitutionkwasknecessaryktokvalidatekthekFederalki
ncomektaxkonkcorporations.
a. True
b. False

22.kOnekofkthekmajorkreasonskforkthekenactmentkofkthekFederalkestatektaxkwasktokpreventklargekamountskofkwealthkf
romkbeingkaccumulatedkwithinkakfamilykunit.
a. True
b. False

23.kUnderkstatekamnestykprograms,kallkdelinquentkandkunpaidkincomektaxeskarekforgiven.
a. True
b. False

24.kInkpreparingkankincomektaxkreturn,kthekusekofkakclient’skestimateskisknotkpermitted.
a. True
b. False

25.kThekFederalk estatekandkgiftktaxeskarekexamplesk ofk progressivekratek taxes.
a. True
b. False

26.kDuringkanykmonthkinkwhichkbothkthekfailurektokfilekpenaltykandkthekfailurektokpaykpenaltykapply,kthekfailurektokfilek
penaltykiskincreasedkbykthekamountkofkthekfailurektokpaykpenalty.
a. True
b. False

27.kForktheknegligencekpenaltyktokapply,kthekunderpaymentkmustkbekcausedkbykintentionalkdisregardkofkruleskandkr
egulationskwithoutkintentktokdefraud.
a. True
b. False

28.kUnderkClint’skwill,kallkofkhiskpropertykpassesktokeitherkthekLutherankChurchkorktokhiskspouse.kNokFederalkestatekt
axkwillkbekduekonkClint’skdeath.
a. True
b. False

29.kForkstatekincomektaxkpurposes,ksomekstateskallowkakcreditkforkdependentskratherkthankakdeduction.
a. True
b. False




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, Name: Class: Date:

Chapterk01k 2025kIndividuals

30.kIfkakspecialkagentkbecomeskinvolvedkinkthekauditkofkakreturn,kthiskindicateskthatkthekIRSksuspectskthatkfraudkiski
nvolved.
a. True
b. False

31.kAskakmatterkofkadministrativekconvenience,kthekIRSkwouldkpreferktokhavekCongresskdecreasek(ratherkthanki
ncrease)kthekamountkofkthekstandardkdeductionkallowedktokindividualktaxpayers.
a. True
b. False

32.kThekFederalkincomektaxkonkindividualskgenerateskmorekrevenuekthankthekFederalkincomektaxkonkcorporations.
a. True
b. False

33.kSomekstateskusektheirkstatekincomektaxkreturnkaskakmeanskofkcollectingkunpaidkusektax.
a. True
b. False

34.kAnkofficekauditkbykthekIRSktakeskplacekatkthekofficekofkthektaxpayer.
a. True
b. False

35.kThekIRSkiskrequiredktokredeterminekthekinterestkratekonkunderpaymentskandkoverpaymentskoncekakyear.
a. True
b. False

36.kThekIRSkagentkauditingkthekreturnkwillkissuekankRARkevenkifkthektaxpayerkowesknokadditionalktaxes.
a. True
b. False

37.kWhenkakstatekdecoupleskfromkakFederalktaxkprovision,kitkmeanskthatkthiskprovisionkwillknotkapplykforkstatekincomekt
axkpurposes.
a. True
b. False

38.kIfkaktaxpayerkfileskearlyk(i.e.,kbeforekthekduekdatekofkthekreturn),kthekstatutekofklimitationskonkassessmentskbeginsk
onkthekdatekthekreturnkiskfiled.
a. True
b. False

39.kThekannualkexclusion,kcurrentlyk$18,000,kiskavailablekforkgiftkandkestatektaxkpurposes.
a. True
b. False




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