Solutions to Chapter 5 Problem Assignments
Check Your Understanding
1. Trade or Business
What are the characteristics of a qualified trade or business?
Solution: To be a qualified trade or business, an activity must have a profit motive (to make
In evaluating the hierarchy of authority in tax law, which of the following carries the greatest authoritative value for tax
planning of transactions?
Internal Revenue Code.
Tax court decisions.
IRS agents' reports.
Which of the foll
Latoya filed her tax return on February 10th this year. When will the statute of limitations expire for this tax return if
Latoya understated her income by 40 percent?
6 years from February 10th
6 years from April 15th
3 years from Ap
1. Which of the following has the highest authoritative weight?
Private letter ruling.
Which of the following committees typically initiates tax legislation?
House Ways and Means Committee.
Question #1 (PTAX-0009)
At December 31, 2013, Lincoln and Ebert were equal partners in a partnership with net assets having a tax basis and fair
market value of $150,000. On January 2, 2013, Gregory contributed securities with a fair market value of $75,0
Which one of the following types of income is not U.S. source income?
Salary earned in the United States.
Interest income on United States Treasury Bonds.
Income from the sale of land by a Japanese resident to a taxpayer whose residence is
in the United S
1. Which of the following foreign taxes is not a creditable foreign tax for U.S. tax purposes?
Income tax paid to the government of Portugal
Income tax paid to the city of Amsterdam
Value-added tax paid to the government of France
All of the taxes are cre
The Morality of Radical Economics: Ghost Curve Ideology and the Value
Neutral Aspect of Neoclassical Economics
To be published by Palgrave Macmillan
Do not cite without Authors Permission
August 28, 2015
Table of Contents
Part I: Economics