Quiz 1 y Quiz 2 correjido

Quiz 1 y Quiz 2 correjido - Quiz 1 correjido Grade Details...

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Quiz 1 correjido Grade Details 1. Question: (TCO A) A taxpayer may litigate a tax dispute without first paying the tax in the: Your Answer: U.S. District Court U.S. Tax Court CORRECT U.S. Court of Federal Claims All of the above Instructor Explanation: Chapter 2 Points Received: 6 of 6 2. Question: (TCO F) A business bad debt is deductible for tax purposes as a(n): Your Answer: Short-term capital loss Ordinary business deduction CORRECT Long-term capital loss Business casualty loss Instructor Explanation: Chapter 6. IRC Sec. 166. Points Received: 6 of 6 3. Question: (TCO I) Under the cash method of tax accounting, tax deductions are generally taken when: Your Answer: The liability arises The taxpayer elects to take the deduction Payment is made CORRECT None of the above Instructor Explanation: Chapter 13. Under the cash basis, deductions are generally taken for the year in which the related expenditures were actually paid. Points Received: 6 of 6 4. Question: (TCO A) Which of the following does not constitute tax evasion?
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Your Answer: Arranging your affairs to keep your tax liability as low as possible under the tax law. Trying to legitimately maximize profits. Trying to legitimately minimize your tax liability. All of the above. CORRECT Instructor Explanation: Chapter 1. Once a transaction is completed, it must be disclosed. Points Received: 6 of 6 5. Question: (TCO C) Which of the following items is not subject to federal income tax? Your Answer: Interest on U.S. Treasury bonds. Gambling winnings. Interest on loans made in the ordinary course of business. Life insurance proceeds. CORRECT Instructor Explanation: Chapter 5. Life insurance proceeds are excluded from gross income. IRC Sec. 101. Points Received: 6 of 6 6. Question: (TCO B) Sam owes Bob $8,000. Bob cancels (forgives) the debt. The cancellation is not a gift and Sam is neither insolvent nor bankrupt. Which of the following statements is correct concerning the impact of this transaction? Your Answer: Both Bob and Sam recognize $8,000 of taxable income. Bob recognizes $8,000 of taxable income. Sam recognizes $8,000 of taxable income. CORRECT Neither Bob nor Sam has any taxable income from this transaction. Instructor Explanation: Chapter 4. When a taxpayer's debt is forgiven (outside of bankruptcy), he recognizes income equal to the amount forgiven. Points Received: 6 of 6 7. Question: (TCO G) Jane purchased an annuity contract that pays her $800 per month. The annuity cost her $50,000 and it has an expected return of $100,000. How much of each monthly annuity payment is includible in Jane's gross income? Your Answer: $400 CORREC T $440 $500 $0 Instructor Explanation: Chapter 5. Exclusion ratio = 50,000 / 100,000 = 50%. Therefore, 50% of each annuity payment is included in gross income. $800 x .50 = $400.
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Points Received: 6 of 6 8. Question: (TCO F) Section 197 intangible assets such as goodwill are amortized for tax purposes over: Your Answer: 15 years CORRECT ANSWER 3 years 6 years Goodwill is not amortized INCORRECT Instructor Explanation: Chapter 6. IRC 197(a) Points Received: 0 of 6 9. Question: (TCO E) Explain the Economic Benefit Doctrine.
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Quiz 1 y Quiz 2 correjido - Quiz 1 correjido Grade Details...

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