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Test Bank For South Western Federal Taxation 2016 Individual Income Taxes 39th Edition by James H. Boyd, William H. Jr. Hoffman, David M. Maloney, William A. Raabe, James C. Young Chapter 1-20 $16.49
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Test Bank For South Western Federal Taxation 2016 Individual Income Taxes 39th Edition by James H. Boyd, William H. Jr. Hoffman, David M. Maloney, William A. Raabe, James C. Young Chapter 1-20
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Test Bank For South Western Federal Taxation 2016 Individual Income Taxes 39th Edition by James H. Boyd, William H. Jr. Hoffman, David M. Maloney, William A. Raabe, James C. Young Chapter 1-20

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  • November 7, 2024
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Test Bank For
South Western Federal Taxation 2016 Individual Income Taxes 39e James H. Boyd, William H. Jr. Hoffman,
David M. Maloney, William A. Raabe, James C. Young
Chapter 1-20

Chapter 01 - An Introduction to Taxation and Understanding the Federal Tax Law

1. The ratification of the Sixteenth Amendment to the U.S. Constitution was necessary to validate the Federal income tax
on corporations.
a. True
b. False
ANSWER: False
RATIONALE: The Sixteenth Amendment validated only the tax on individuals. The income tax on
corporations had been previously sanctioned by the courts.
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SIIT.HOSM.15.LO: 1-02 - LO: 1-02
NATIONAL STANDARDS: United States - BUSPROG: Technology: Technology: - BUSPROG: Technology
STATE STANDARDS: United States - AK - AICPA: FN-Research
KEYWORDS: Bloom's: Knowledge
OTHER: Time: 2 min.

2. Before the Sixteenth Amendment to the Constitution was ratified, there was no valid Federal income tax on individuals.
a. True
b. False
ANSWER: False
RATIONALE: There existed a Federal income tax during the Civil War that was sanctioned by the U.S.
Supreme Court.
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SIIT.HOSM.15.LO: 1-02 - LO: 1-02
NATIONAL STANDARDS: United States - BUSPROG: Technology: Technology: - BUSPROG: Technology
STATE STANDARDS: United States - AK - AICPA: FN-Research
KEYWORDS: Bloom's: Knowledge
OTHER: Time: 2 min.

3. The first income tax on individuals (after the ratification of the Sixteenth Amendment to the Constitution) levied tax
rates from a low of 2% to a high of 6%.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SIIT.HOSM.15.LO: 1-02 - LO: 1-02
NATIONAL STANDARDS: United States - BUSPROG: Technology: Technology: - BUSPROG: Technology
STATE STANDARDS: United States - AK - AICPA: FN-Research
KEYWORDS: Bloom's: Knowledge

,OTHER: Time: 2 min.

4. The Federal income tax on individuals generates more revenue than the Federal income tax on corporations.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SIIT.HOSM.15.LO: 1-02 - LO: 1-02
NATIONAL STANDARDS: United States - BUSPROG: Technology: Technology: - BUSPROG: Technology
STATE STANDARDS: United States - AK - AICPA: FN-Research
KEYWORDS: Bloom's: Knowledge
OTHER: Time: 2 min.

5. The pay-as-you-go feature of the Federal income tax on individuals conforms to Adam Smith’s canon of certainty.
a. True
b. False
ANSWER: False
RATIONALE: Pay-as-you-go refers to the withholding provisions applicable to wages and other types of
income and adds convenience to the tax system.
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SIIT.HOSM.15.LO: 1-03 - LO: 1-03
NATIONAL STANDARDS: United States - BUSPROG: Technology: Technology: - BUSPROG: Technology
STATE STANDARDS: United States - AK - AICPA: FN-Reporting
KEYWORDS: Bloom's: Comprehension
OTHER: Time: 2 min.

6. Because the law is complicated, most individual taxpayers are not able to complete their Federal income tax returns
without outside assistance.
a. True
b. False
ANSWER: True
RATIONALE: Approximately 56% use tax return preparers and about 33% purchase tax return software.
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: SIIT.HOSM.15.LO: 1-03 - LO: 1-03
NATIONAL STANDARDS: United States - BUSPROG: Technology: Technology: - BUSPROG: Technology
STATE STANDARDS: United States - AK - AICPA: FN-Reporting
KEYWORDS: Bloom's: Knowledge
OTHER: Time: 2 min.

7. The FICA tax (Medicare component) on wages is progressive since the tax due increases as wages increase.
a. True
b. False
ANSWER: False
RATIONALE: The FICA tax (Medicare component) is proportional because the rate is constant regardless
of the wages earned.

,POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SIIT.HOSM.15.LO: 1-03 - LO: 1-03
NATIONAL STANDARDS: United States - BUSPORG: Analytic
STATE STANDARDS: United States - AK - AICPA: FN-Measurement -
AICPA: FN-Measurement
KEYWORDS: Bloom's: Comprehension
OTHER: Time: 2 min.

8. The Federal estate and gift taxes are examples of progressive taxes.
a. True
b. False
ANSWER: True
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SIIT.HOSM.15.LO: 1-03 - LO: 1-03
NATIONAL STANDARDS: United States - BUSPORG: Analytic
STATE STANDARDS: United States - AK - AICPA: FN-Measurement -
AICPA: FN-Measurement
KEYWORDS: Bloom's: Comprehension
OTHER: Time: 2 min.

9. The Federal excise tax on cigarettes is an example of a proportional tax.
a. True
b. False
ANSWER: True
RATIONALE: The tax is a flat $1.01 per pack.
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SIIT.HOSM.15.LO: 1-03 - LO: 1-03
NATIONAL STANDARDS: United States - BUSPORG: Analytic
STATE STANDARDS: United States - AK - AICPA: FN-Measurement -
AICPA: FN-Measurement
KEYWORDS: Bloom's: Comprehension
OTHER: Time: 2 min.

10. Currently, the Federal income tax is less progressive than it ever has been in the past.
a. True
b. False
ANSWER: False
RATIONALE: Currently, the Federal income tax has six rates. At one time, it had two rates.
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SIIT.HOSM.15.LO: 1-03 - LO: 1-03
NATIONAL STANDARDS: United States - BUSPORG: Analytic
STATE STANDARDS: United States - AK - AICPA: FN-Measurement -
AICPA: FN-Measurement

, KEYWORDS: Bloom's: Comprehension
OTHER: Time: 2 min.

11. Mona inherits her mother’s personal residence, which she converts to a furnished rent house. These changes should
affect the amount of ad valorem property taxes levied on the properties.
a. True
b. False
ANSWER: True
RATIONALE: Conversion from residential to rental use will increase the taxes. Furthermore, Mona’s mother
may have had a senior citizen exemption on the property, which will no longer be
appropriate. Lastly, the furnishings in the rent house could now be subject to an ad valorem
tax on personalty.
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SIIT.HOSM.15.LO: 1-04 - LO: 1-04
NATIONAL STANDARDS: United States - BUSPORG: Analytic
STATE STANDARDS: United States - AK - AICPA: FN-Measurement -
AICPA: FN-Measurement
KEYWORDS: Bloom's: Comprehension
OTHER: Time: 2 min.

12. A fixture will be subject to the ad valorem tax on personalty rather than the ad valorem tax on realty.
a. True
b. False
ANSWER: False
RATIONALE: By definition, a fixture becomes part of the real estate to which it is attached.
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SIIT.HOSM.15.LO: 1-04 - LO: 1-04
NATIONAL STANDARDS: United States - BUSPORG: Analytic
STATE STANDARDS: United States - AK - AICPA: FN-Measurement -
AICPA: FN-Measurement
KEYWORDS: Bloom's: Comprehension
OTHER: Time: 2 min.

13. Even if property tax rates are not changed, the amount of ad valorem taxes imposed on realty may not remain the
same.
a. True
b. False
ANSWER: True
RATIONALE: Property taxes will vary in accordance with changes in the assessed value of the property.
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: SIIT.HOSM.15.LO: 1-04 - LO: 1-04
NATIONAL STANDARDS: United States - BUSPORG: Analytic
STATE STANDARDS: United States - AK - AICPA: FN-Measurement -
AICPA: FN-Measurement
KEYWORDS: Bloom's: Comprehension

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