1. Which of the following taxes are proportional (rather than progressive)?
a. State general sales tax.
b. Federal income tax.
c. Federal estate tax.
d. Federal gift tax.
2. Burt and Lisa are married and live in a common law state. Burt wants to make gifts to their four children in 2014 and plans to use the election to split gifts. What is the maximum total amount of the annual exclusion they will be allowed for these gifts (total includes gifts to all children)?
3. The Federal income tax applicable to corporations:
a. Allows a deduction for the standard deduction.
b. Requires the determination of adjusted gross income.
c. Requires the determination of taxable income.
d. Allows a deduction for personal exemptions.
4. A characteristic of FICA is that:
a. It does not apply when one spouse works for the other spouse.
b. It is imposed only on the employer.
c. It provides a modest source of income for retired employees.
d. It is a progressive tax since the tax due increases as wages increase.
5. David files his tax return 45 days after the due date. Along with the return, David remits a check for $40,000 which is the balance of the tax owed. Disregarding the interest element, David's total failure to file and to pay penalties are:
6. The Federal tax law is designed to accomplish which of the following objectives?
d. All of the above.
7. In 2014, Quinn had the following transactions:
Alimony received $ 8,000
Salary earned 50,000
Cash dividends received on stock investment 1,000
Gift received 20,000
Quinn's AGI for 2014 is:
8. Which of the following is a deduction for AGI?
a. Charitable contributions.
b. Mortgage interest paid.
c. State income taxes withheld.
d. Interest on student loans.
9. Ellen is single and has taxable income for 2013 was $38,905. Using the 2013 tax tables (Appendix A), the tax on Ellen's taxable income is:
10. Kyle, whose wife died in December 2011, filed a joint tax return for 2011. He did not remarry, but has continued to maintain his home in which his two dependent children live. What is Kyle's filing status as to 2014?
a. Head of household.
b. Surviving spouse.
d. Married filing separately.
11. A child has $5,000 of unearned income. In which, if any, of the following situations will the kiddie tax not apply?
a. The child is married but does not file a joint return.
b. Both parents are deceased.
c. The child has earned income that does not exceed more than half of his support.
d. The child is under age 24 and a full-time student.
12. During 2014, Olivia sold the following assets: business equipment for a $8,000 loss, stock investment for a $10,000 loss, and her principal residence for a $26,000 loss. Presuming adequate gains and income, how much of these losses may Olivia claim on her 2014 return?
The following posting helps with practice exam questions on individual taxation.
Business law: practice exam questions
Please respond to the following questions:
1. Barb is a purchasing agent for Commercial Sales Corp. Alex, a Commercial Sales corporate officer, gives Barb a letter of authority to buy for the company as many computers and accessories as needed. The next day, Alex calls Barb and tells her to buy only 20 notebook computers and nothing else. Barb shows the letter of authority to Eager Computer Co., and enters into a contract with Eager to buy 40 notebook computers, 5 printers, and a scanner. Eager ships all of these items to Commercial Sales. Is Commercial Sales legally obligated to Eager under the contract? Explain why or why not. Is Barb personally obligated? Explain your answers.
2. Agents and employees of Blue Corporation and Green Corporation are convicted of conspiring to violate a federal law that is punishable by a term of imprisonment and a fine. Can the corporations be held liable for these crimes? If so, how can they be punished? Explain your answers.
3. Dan is a promoter for the soon-to-be-incorporated firm of E-Business, Inc. Dan signs a contract with Smith & Jones, Accountants, to render their services before E-Business is incorporated and for one year after the incorporation. E-Business is incorporated. Three months later, after Smith & Jones has continued performing under the contract, the E-Business board of directors tells the accountants that it is canceling their contract. Smith & Jones files a suit against Dan and E-Business, alleging breach of contract. Will Smith & Jones prevail? Explain your answers.
4. Arnold is the chief executive officer of Beta Corporation. Arnold's responsibilities include decisions on product development, marketing, and other significant business directions. Arnold is subject to the approval and oversight of Beta's board of directors. Carol is a Beta manager whose duties include the firm's day-to-day hiring, firing, purchasing, and selling. Dave is a Beta salesperson, whose daily activities are controlled by Carol. Erin writes technical manuals for Beta products according to Arnold's instructions and has no dealings with Beta customers or suppliers. Fred edits the manuals on a contract-per-manual basis and is not otherwise subject to Beta's control. Identify who among these people is a principal, who is an agent, who is an employee, and who is an independent contractor? Explain your answers.
5. Abe, Beth and Cindy want to form Marketing Specialties, LLC (limited liability company). What issues should they address in their operating agreement? If they fail to include some important operating details, what determines these details?View Full Posting Details