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Study Resources (Accounting)

11) Under the Subpart F rules, controlled foreign corporations (CFCs) are required to distribute a certain portion of their income as dividends to their U.S. shareholders. 12) A nonresident alien can elect to be considered a resident alien if the nonresident alien is married to a U.S. citizen or a resident.
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31) The tax law encompasses administrative and judicial interpretations, such as Treasury regulations, revenue rulings, revenue procedures, and court decisions, as well as statutes. 32) Generally, tax legislation is introduced first in the Senate and referred to the Senate Finance Committee. 33) The Internal Revenue Service is the branch of the Treasury.
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41) A single taxpayer provided the following information for 2013: Salary $80,000 Interest on local government bonds (qualifies as a tax exclusion) 4,000 Allowable itemized deductions 13,000 What is taxable income? A) $57,100 B) $63,100 C) $67,000 D) $67,100 42) Which of the following types of itemized deductions are included in the category of miscellaneous expenses that are deductible only if the.
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21) Adam Smith's canons of taxation are equity, certainty, convenience and economy. 22) The primary objective of the federal income tax law is to achieve various economic and social policy objectives. 23) Individuals are the principal taxpaying entities in the federal income tax system. 24) The various entities in the federal income tax.
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41) Identify which of the following statements is false. A) A nonresident alien can elect to have income earned on a passive real estate investment treated as trade or business income. B) Nonresident aliens may use either the standard deduction or claim itemized deductions. C) Nonresident aliens are generally allowed to claim only.
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61) Tax return preparers can be penalized for the following activities except A) failure to sign a return. B) failure to give a copy of the return to the taxpayer. C) failure to maintain IRS continuing education requirements. D) failure to provide the preparer's identification number on the return. 62) What is the penalty for.
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76) Cane Corporation owns 45% of the stock of Edmonton Airline Corporation. In its first year of operations, Edmonton Airline, a Canadian corporation, reports $400,000 of E&P and pays a $100,000 dividend to Cane Corporation. Edmonton Airline pays $50,000 in Canadian income taxes. All amounts are expressed in U.S. dollars..
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31) The IRS will issue a ruling A) on prospective transactions only. B) only if regulations have been issued on the subject. C) on a completed transaction for which a return has been filed. D) to clarify the tax treatment of a transaction. 32) Identify which of the following statements is false. A) The IRS issues.
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74) Briefly discuss the reasons for establishing a trust. 75) Briefly discuss some of the reasons for using a revocable trust. 76) This year, the Huang Trust received $20,000 of dividends and $30,000 of tax-free interest. It distributes all of its receipts to its beneficiary. How should the beneficiary treat the distribution? 77).
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96) For innocent spouse relief to apply, five conditions must be met. Explain them. 97) Jayne and Jon jointly file a tax return this year. Jayne fraudulently reports two expenses on Schedule C:  $2,000 and $2,500. The IRS audits the return, assesses a $1,050 deficiency, and begins collection efforts two years.
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51) Identify which of the following statements is true. A) An individual taxpayer may be subject to a penalty for underpayment of estimated taxes if his balance of tax due when he files is $500. B) A penalty for substantial understatement will potentially be assessed on an individual if the underpayment of.
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1) Gross income is income from whatever source derived less exclusions. 2) Although exclusions are usually not reported on an individual's income tax return, interest income on state and local government bonds must be reported on the tax return. 3) Generally, deductions for (not from) adjusted gross income are personal expenses specifically.
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81) A trust document does not mention the treatment for depreciation. The state has adopted the Uniform Act.  The trust document states that depreciation is a charge against corpus. The trust results are the following: Business net profits$2,000 Rental income              1,000 Depreciation              100 Rent expense              100 Calculate net accounting income. 82) Ebony Trust was established two.
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93) What is a corporate inversion and why was this provision enacted? 94) Explain the alternatives available to individual taxpayers for reporting foreign income taxes that have been paid or accrued. 95) Compare the foreign tax payment claimed as a deduction versus a similar payment claimed as a credit. Create an example.
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41) Charlotte pays $16,000 in tax deductible property taxes. Charlotte's marginal tax rate is 28%, effective tax rate is 22% and average rate is 25%. Charlotte's tax savings from paying the property tax is A) $3,520. B) $4,000. C) $4,480. D) $11,520. 42) Anne, who is single, has taxable income for the current year of.
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11) Treasury Department Circular 230 regulates the practice of attorneys, CPAs, enrolled agents, and enrolled actuaries before the IRS. 12) Anyone who prepares a tax return is subject to the provisions of Circular 230. 13) The Internal Revenue Service is part of the A) Congress. B) Treasury Department. C) Federal Bureau of Investigation. D) U.S. Customs.
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11) If a taxpayer's total tax liability is $4,000, taxable income is $20,000, and total economic income is $40,000, then the effective tax rate is 20 percent. 12) All states impose a state income tax which is generally based on an individual's federal adjusted gross income (AGI) with minor adjustments. 13) The.
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61) Rocky and Charlie form RC Partnership as equal partners. Rocky contributes $100,000 into RC while Charlie contributes real estate with a fair market value of $100,000. During the current year, RC earned net income of $600,000. The partnership distributes $200,000 to each partner. The amount that Rocky should report.
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31) Identify which of the following statements is false. A) Earned income is excludable from gross income only if it is foreign-source income. B) Taxable pensions and annuities are excluded from the definition of earned income when computing the foreign-earned income exclusion. C) An individual meets the bona fide resident test by establishing.
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51) Which of the following statements is incorrect? A) Property taxes are levied on real estate. B) Excise taxes are assessed on items such as gasoline and telephone use. C) Gift taxes are levied on the recipient of a gift. D) The estate tax is based on the fair market value of property at.
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89) A simple trust has the following results: DNI              $60,000 Net tax-exempt interest              8,000 Net accounting income              62,000 Calculate the distribution deduction. 90) In the year of termination, a trust incurs a $20,000 NOL. In addition, it has a $30,000 NOL carryover from the two preceding tax years. The trust distributes 40% of its assets.
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1) U.S. citizens, resident aliens, and domestic corporations are taxed by the U.S. government on their worldwide income at regular U.S. tax rates. 2) If foreign taxes on foreign income exceed U.S. taxes on foreign income, the excess foreign taxes are credited against U.S. taxes in the current year. 3) Income derived.
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21) A U.S. citizen accrued $120,000 of creditable foreign taxes last year. The citizen's foreign tax credit limitation for last year is $90,000 (only a single limitation need be calculated). The excess foreign tax credit limitation for the year preceding the year in which the excess foreign taxes were incurred.
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97) Guinness Corporation, a U. S. corporation, began operating overseas in the current year. This year, Guinness sold machine tools that it manufactured in the United States to Canadian companies from a branch office located in Toronto, purchased a 40% investment in a Brazilian corporation from which it received a.
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88) Chris, a single taxpayer, had the following income and deductions during 2013? Salary$55,000 Interest on bank account              300 Tax-exempt interest200 Deduction for AGI4,000 Itemized deductions 8,000 Taxes withheld 6,500 Calculate Chris's tax liability due or refund for 2013. 89) During the current tax year, Frank Corporation generated gross income of $1,900,000 and had ordinary and necessary.
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98) The Tucker Trust was established six years ago. The trust is required to distribute all of the trust income at least annually to Betty for life. Capital gains are credited to principal. The current year results of the trust are as follows: Amounts Allocable To IncomePrincipal Dividends              $15,000 Rental income from land              2,500 Tax-exempt.
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