Chapter 12 Practice Quiz
1. Bart owns 100% of an S corporation that had a net operating loss in the current year. If there is
sufficient basis in the stock, he will carry this loss back to reduce taxes in a prior S corporation
2. If a new
Chapter 11 Practice Quiz
1. At least three corporations are required to form an affiliated group.
2. Rogers, Inc. owns 12% of Lampe Corporation's voting common stock. During the current
year, Rogers generated $50,000 operating income and received $8
Chapter 14 Practice Quiz
1. A taxpayer who knowingly signs a joint return on which his spouse has failed to report her
babysitting income is liable for any tax assessments made by the IRS on that income.
2. An individual's taxable income is equal to
Chapter 16 Practice Quiz
1. Chester, a single taxpayer, gave $50,000 to an old friend. The entire $50,000 is subject to gift
2. In 2013, Mrs. Owens paid $50,000 for 3,000 shares of a mutual fund and elected to reinvest
dividends in additional s
Chapter 15 Practice Quiz
1. Which of the following statements concerning the characteristics of the employer-independent
contractor relationship is false?
A. An employer may only accept or reject the final results of the work of an independent
Chapter 6 Practice Quiz
1. A taxpayer that operates more than one business may use a different method of accounting for each
Poole Company, a calendar year taxpayer, incurred $589 of long-distance telephone charges i
Chapter 9 Practice Quiz
1. When unrelated parties agree to an exchange of noncash properties, the economic presumption
is that the properties are of equal value.
2. A taxpayer who receives or pays boot in a nontaxable exchange must recognize gain to
Chapter 7 Practice Quiz
1. Burton Company acquired new machinery by performing professional services worth $8,250
for the seller of the machinery. Burton's tax basis in the machinery is $8,250.
2. In an inflationary economy, the use of FIFO maximizes
Chapter 8 Practice Quiz
1. The same asset may be an ordinary asset in the hands of one taxpayer and a capital asset in the
hands of a different taxpayer.
2. For tax purposes, every asset is a noncapital asset unless it falls into one of eight categor
Chapter 10 Practice Quiz
1. Matthew earned $150,000 in wages during 2015. FICA taxes withheld by his employer would
have been $11,475.
The social security portion of the payroll tax applies only to the first $118,500 at the rate of
6.2%, and 1.45% a