Federal Taxation Test 1 Exam Questions With Answers
14 views 0 purchase
Course
Federal Taxation
Institution
Federal Taxation
Federal Taxation Test 1 Exam Questions With Answers
Which of the following is an example of a progressive tax system?
Social Security Tax
A sales tax
A proportional tax
U.S. Federal Income Tax
U.S. Federal Income Tax
Which of the following is considered a tax?
Fees to register an au...
federal taxation test 1 exam questions with answer
Written for
Federal Taxation
All documents for this subject (66)
Seller
Follow
ACADEMICAIDSTORE
Reviews received
Content preview
Federal Taxation Test 1 Exam Questions With
Answers
Which of the following is an example of a progressive tax system?
Social Security Tax
A sales tax
A proportional tax
U.S. Federal Income Tax
U.S. Federal Income Tax
Which of the following is considered a tax?
Fees to register an automobile
Speeding ticket
Entrance fee for a national museum
Local surcharge for a homeowner to connect to city sewer service
1% local surcharge on hotel rooms to pay for city government
1% local surcharge on hotel rooms to pay for city government
Mitch, a single taxpayer, earns $100,000 in taxable income and $10,000 in interest from an
investment in the city of Birmingham Bonds. Using the U.S. tax rate schedule for year 2018, how
much federal tax will he owe?
Marc, a single taxpayer, earns $100,000 in taxable income and $10,000 in interest from an investment
in city of Birmingham Bonds. Using the U.S. tax rate schedule for year 2018, what is his average tax
rate (rounded)?
22.00%
13.88%
18.29%
24.00%
18.29%
, Total Tax -> $18,289.50 ÷ Taxable Income -> $100,000
Marc, a single taxpayer, earns $100,000 in taxable income and $10,000 in interest from an investment
in city of Birmingham Bonds. Using the U.S. tax rate schedule for year 2018, what is his effective tax
rate (rounded)?
22.00%
24.00%
18.29%
16.63%
16.63%
Total Tax -> $18,289.50 ÷ Total Income -> $110,000
Marc, a single taxpayer, earns $100,000 in taxable income and $10,000 in interest from an investment
in city of Birmingham Bonds. If Marc earned an additional $80,000, what would his 2018 marginal tax
rate be on the $80,000 (rounded)?
26.25%
24.00%
32.48%
32.00%
26.25%
$57,500 (remaining in previous tax bracket) * 24% = $13,800
$22,500 (applying to next tax bracket) * 32% = $7,200
$13,800 + $7,200 = $21,000
$21,,000 = 26.25%
James invests $100,000 in the city of Athens bond that pays 8% interest. Alternatively, James could
have invested the $100,000 in a bond recently issued by HighTech, Inc. that pays 10% interest with
similar risk as the city of Athens bond. Assume that James's marginal tax rate is 25%. Which bond
should James choose and why?
The HighTech, Inc. bond because it earns a higher pre-tax rate of return.
The HighTech, Inc. bond because it earns a high after-tax rate of return.
The city of Athens bond because it earns a high pre-tax rate of return.
The city of Athens bond because it earns a higher after-tax rate of return.
James should be indifferent between the two bonds.
The city of Athens bond because it earns a higher after-tax rate of return.
City of Athens bond
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller ACADEMICAIDSTORE. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $11.09. You're not tied to anything after your purchase.
