Chapter 5 - Business Deductions
1. An expense need not be recurring in order to be ordinary.
2. Aaron, a shareholder-employee of Pigeon, Inc., receives a $300,000 salary. The IRS classifies $100,000 of
this amount as unreasonable com
Chapter 4 - Gross Income
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 $1,000 in 2013 and it
Chapter 6 - Losses and Loss Limitations
1. James is in the business of debt collection. He purchased a $20,000 account receivable from Green
Corporation for $15,000. During the year, James collected $17,000 in final settlement of the account. J
Chapter 1 - Introduction To Taxation
1. The FICA tax (Medicare component) on wages is progressive since the tax due increases as wages increase.
2. The Federal estate and gift taxes are examples of progressive taxes.
Class: Date: ID: A
Sample Questions Exam 1
Taylor, a widow, makes cash gifts to her ve married children (including their spouses) and to her seven
grandchildren. What is the maximum amount Taylor can give for calendar year 2013 with