6. What is the difference between a corporation and a partnership for income tax purposes? a. Corporations pay income taxes, partnerships only report taxes b. Both pay income taxes c. Both have a higher income tax rate than individuals d. Only the majority partner pays partnership income taxes. 7. Which government statute allows for the collection of income taxes, and what income is allowed to be taxed? a. Article Five of the Constitution; all earned and investment income b. Sixteenth Amendment: income from whatever source derived c. Thirteenth Amendment; lawfully earned income d. ERISA Legislation: all income from wages or barter 8. Capital Gains and Losses are created when: a. The taxpayer has a loss or gain on inventory b. The taxpayer has a gain or loss in a capital city such as Sacramento or Washington DC. c. Only in strong economic times d. The taxpayer has a loss or gain on the sale of a capital asset 9. Which of the following are not included in Gross Income? a. Punitive Damages b. Debts forgiven c. Embezzled Funds d. Inheritances 10. A W-2 Form does not contain which of the following items for the employee? a. All wages and compensation earned b. Net tax liability c. All taxes withheld for this employee d. Retirement plan information