The Internal Revenue Code is an example of (Points : 5)

judicial authority. statutory authority. administrative authority. All of the above

Question 2.2. (TCO 2) A tax that is based on a persons eye color does not meet the standard that a good tax should be (Points : 5)

sufficient. convenient. efficient. fair.

Question 3.3. (TCO 3) John and Jennie Thomas are married and wish to file their taxes jointly. They are both 52 years old, neither is legally blind, and they had combined wage income of $85,000 in 2013. They also had interest income of $1,000 from a certificate of deposit and itemized deductions of $10,500. Their Taxable income for 2013 is (Points : 5)

$63,500. $65,500. $66,000. $68,500.

Question 4.4. (TCO 4) Which of the following is a true statement? (Points : 5)

An employee can set his or her own hours. An employee provides services to many employees. An employee gets a W-4 at the end of the year. An independent contractor gets a 1099-MISC at the end of the year.

Question 5.5. (TCO 5) Julia owns a condominium near the university that she rents to students. The condominium generated a $21,000 loss in 2013. Before the loss deduction, Julias AGI was $75,000. How much of the loss on the condominium is deductible for Julia? (Points : 5)

$25,000 $21,000 $4,000 $0

Question 6.6. (TCO 6) An inter vivos transfer is (Points : 5)

the transfer of money between bank accounts. when property is transferred after the death of the transferor. when property is transferred as a gift while the transferor is still alive. when property is transferred as a gift while the transferee is still alive.

Question 7.7. (TCO 7) Quentin and Linda were divorced in 2012. In 2013, Quentin paid Linda $25,000 in alimony and $4,600 in child support. Linda received a W-2 from her job for $35,000 in 2013. What is Lindas AGI? (Points : 5)

$25,000 $35,000 $60,000 $64,6000

Question 8.8. (TCO 8) A revenue agent has determined that Michael understated his tax liability for 2013 by $100,000. The agent concluded that $25,000 of the understatement was due to sloppy record keeping, and the remainder of the understatement was caused by his misapplication of a complex tax provision. What is the negligence penalty that the revenue agent can impose on Michael? (Points : 5)

$20,000 $5,000 $2,500 $0

Question 9.9. (TCO 8) What can taxpayers do after they take their cases to the U.S. Tax Court and lose? (Points : 5)

Nothing, and they must pay the proposed tax deficiency. They may only appeal their cases to the one specific U.S. Circuit Court of Appeals that is appropriate for their geographic location. They may only appeal their cases directly to the U.S. Supreme Court. They may only appeal their cases to any one of the thirteen U.S. Circuit Courts of Appeals.

Question 10.10. (TCO 9) In which of the following payment situations is there an allowable tax deduction? (Points : 5)

$500 penalty for illegal gambling $500 fine for speeding $500 payment of a legal kickback $100 failure to pay tax penalty

Question 11.11. (TCO 9) In which of the following situations does a cash-basis taxpayer have a fully deductible expense during the current tax year? (Points : 5)

Prepayment of 3 months of insurance in September Prepayment of 24 months of rent in July Both taxpayers have a fully deductible expense during the current tax year. Neither taxpayer has a fully deductible expense during the current tax year.

Question 12.12. (TCO 10) Which of the following is a true statement concerning MACRS? (Points : 5)

MACRS creates temporary book and tax differences. Taxpayers can use any recovery periods that they choose. Recovery periods tend to be longer than useful lives. Residential realty is recovered over 39 years.