CHAPTER 17-CORPORATIONS: INTRODUCTION AND
OPERATING RULES 2 copy
1. Tomas owns a sole proprietorship, and Lucy is the sole shareholder of a C corporation. In the
current year both businesses make a net profit of $60,000. Neither business distributes any f
CHAPTER 13-PROPERTY TRANSACTIONS:
DETERMINATION OF GAIN OR LOSS, BASIS
CONSIDERATIONS, AND NONTAXABLE EXCHANGESPART 1 3 copy
1. Realized gain or loss is measured by the difference between the amount realized from the sale or
other disposition of property
CHAPTER 2-WORKING WITH THE TAX LAW 4 copy
1. A professional must understand the relative weight of authority within the sources of tax law.
2. The Internal Revenue Code of 1986 was substantially a re-codification of the existing Code.
CHAPTER 3-COMPUTING THE TAX 3 copy
1. Under the Federal income tax formula for individuals, a choice must be made between claiming
deductions for AGI and itemized deductions.
2. Under the Federal income tax formula for individuals, the determin
CHAPTER 4-GROSS INCOME: CONCEPTS AND
INCLUSIONS 4 copy
1. The realization requirement gives an incentive to own assets that have increased in value and to
sell assets whose value has decreased.
2. A sole proprietorship purchased an asset for $1
CHAPTER 1-AN INTRODUCTION TO TAXATION AND
UNDERSTANDING THE FEDERAL TAX LAW 2 copy
1. The ratification of the Sixteenth Amendment to the U.S. Constitution was necessary to validate
the Federal income tax on corporations.
2. Before the Sixteenth
CHAPTER 5-GROSS INCOME: EXCLUSIONS 4 copy
1. For a person who is in the 35% marginal tax bracket, $1,000 of tax-exempt income is equivalent
to $1,350 of income that is subject to tax.
2. John told his nephew, Steve, if you maintain my house whe