tax questions true false

| August 14, 2017

1. The
ratification of the Sixteenth Amendment to the U.S. Constitution was necessary
to validate the Federal income tax on corporations.a. Trueb. FalseANSWER: 2. Before
the Sixteenth Amendment to the Constitution was ratified, there was no valid
Federal income tax on individuals.a. Trueb. False3. The first
income tax on individuals (after the ratification of the Sixteenth Amendment to
the Constitution) levied tax rates from a low of 2% to a high of 6%.a. Trueb. FalseANSWER: True4. The
Federal income tax on individuals generates more revenue than the Federal
income tax on corporations.a. Trueb. False5. The
pay­as­you­go feature of the Federal income tax on individuals conforms to Adam
Smith’s canon of certainty.a. Trueb. False?6. Because
the law is complicated, most individual taxpayers are not able to complete
their Federal income tax returns without outside assistance.a. Trueb. False7. The FICA
tax (Medicare component) on wages is progressive since the tax due increases as
wages increase.a. Trueb. False8. The
Federal excise tax on cigarettes is an example of a proportional tax.a. Trueb. False.9. The
Federal estate and gift taxes are examples of progressive taxes.a. Trueb. False10. Currently,
the Federal income tax is less progressive than it ever has been in the past.a. Trueb. False11. Mona
inherits her mother’s personal residence, which she converts to a furnished rent
house. These changes should affect the amount of ad valorem
property taxes levied on the properties.a. Trueb. False12. A fixture
will be subject to the ad valorem tax on personalty rather than the ad valorem
tax on realty.a. Trueb. False13. Even if
property tax rates are not changed, the amount of ad valorem taxes imposed on
realty may not remain the same.a. Trueb. False14. The ad
valorem tax on personal use personalty is more often avoided by taxpayers than
the ad valorem tax on business use personalty.a. Trueb. False15. A Federal
excise tax is no longer imposed on admission to theaters.a. Trueb. False16. There is a
Federal excise tax on hotel occupancy.a. Trueb. False17. The
Federal gas-guzzler tax applies only to automobiles manufactured overseas and
imported into the U.S.a. Trueb. False?18. Like the
Federal counterpart, the amount of the state excise taxes on gasoline varies
from state to state.a. Trueb. False19. Not all of
the states that impose a general sales tax also have a use tax.a. Trueb. False20. Sales made
by mail order are not exempt from the application of a general sales (or use)
tax.a. Trueb. False21. States
impose either a state income tax or a general sales tax, but not both types of
taxes.a. Trueb. False22. 23. Two
persons who live in the same state but in different counties may not be subject
to the same general sales tax rate.a. Trueb. False24. A safe and
easy way for a taxpayer to avoid local and state sales taxes is to make the
purchase in a state that levies no such taxes.a. Trueb. False?25. On
transfers by death, the Federal government relies on an estate tax, while
states impose an estate tax, an inheritance tax, both taxes, or neither tax.a. Trueb. False26. An
inheritance tax is a tax on a decedent’s right to pass property at death.a. Trueb. False.27. Under
Clint’s will, all of his property passes to either the Lutheran Church or to
his wife. No Federal estate tax will be due on Clint’s death in 2014.a. Trueb. False28. One of the
major reasons for the enactment of the Federal estate tax was to prevent large
amounts of wealth from being accumulated within the family unit.a. Trueb. False29. Under the
usual state inheritance tax, two heirs, a cousin and a son of the deceased,
would not be taxed at the same rate.a. Trueb. False30. The annual
exclusion, currently $14,000, is available for gift and estate tax purposes.a. Trueb. False31. In 2014,
José, a widower, sells land (fair market value of $100,000) to his daughter,
Linda, for $50,000. José has not made a taxable gift.a. Trueb. False32. Julius, a
married taxpayer, makes gifts to each of his six children. A maximum of twelve
annual exclusions could be allowed as to these gifts.a. Trueb. False33. One of the
motivations for making a gift is to save on income taxes.a. Trueb. False34. The
formula for the Federal income tax on corporations is the same as that
applicable to individuals.a. Trueb. False35. A state
income tax can be imposed on nonresident taxpayers who earn income within the
state on an itinerant basis.a. Trueb. False?

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