Solved by verified expert :Week 3
(TCO 4)
Which of the following statements is NOT true?
In theory, the IRS should collect the same
amount of tax on a worker’s compensation, whether the worker is an employee or
an independent contractor.
The IRS believes that contractors pay more
taxes than employees.
An employer has a financial incentive to treat
workers as independent contractors rather than employees.
If the IRS reclassifies a worker from
independent contractor to employee, the employer can become liable for the
employee’s share of the unpaid interest and penalties. (General Feedback:
Chapter 15, page 444)
Comments:
Question 2. Question
: (TCO 4) Tom’s annual
compensation is $145,000. What is the maximum amount that Tom’s employer may
contribute to a defined contribution plan on his behalf in 2013?
49,000
3,500
49,000
51,000 (General Feedback:
Chapter 15 Contribution is limited to lesser of compensation
or $51,000, page 465)
Comments:
Question 3. Question
: (TCO 5) Which of the following
statements is NOT true?
The interest earned on state and local debt
instruments is excluded from income for federal tax purposes.
Treasury notes have maturity periods from one
to ten years.
Treasury bonds have maturity periods from 10
to 30 years.
The interest on U.S. debt obligations is
subject to federal income tax. (General Feedback:
Chapter 16, pages 494)
Comments:
Question 4. Question
: (TCO 5) Which of the following
is false about the tax policy reasons offered to justify a preferential tax
rate for capital gains?
Capital gain accrues over time but is taxed
only in the year of sale. Therefore, it is taxed at a higher marginal rate than
would have been likely if gain had been recognized as it accrued.
A preferential rate is not necessary to
counteract the effects of inflation.
A preferential rate encourages the mobility of
capital.
All of these are not reasons offered to
justify a preferential tax rate for capital gains. (General Feedback:
Chapter 16, pages 505-506)
Comments:
Question 5. Question
: (TCO 5) Julia owns an
apartment complex. She is active with respect to this rental activity. This
year, the complex generated a loss of $75,000. Assuming that her AGI before
this item is $120,000 and there are no other passive activities, she may
deduct:
None, and carry over $75,000 of the loss.
$25,000, and carry over the rest of the loss.
$15,000, and carry over the rest of the loss.
$10,000, and carry over the rest of the loss.
(General Feedback:
Chapter 16, pages 508-510. ($120,000-$100,000) *
50%=$10,000, then $25,000 – $10,000)
Comments:
Week 5
(TCO 8)
Which of the following statements is false?
A taxpayer can be charged a penalty for the
late payment of taxes even if an extension to file was granted.
The interest charged on the late payment of
taxes is not deductible on the federal tax return.
The penalty for late filing and late payment
of taxes is 10% of the balance of tax due with the return for each month it is
delinquent. (General Feedback:
Chapter 18, pages 574–577)
A taxpayer who can establish a reasonable
cause for the late filing of his or her tax return will not be charged a late
filing penalty.
Comments:
Question 2. Question
: (TCO 8) Thomas did not extend
or file his 2013 federal tax return until December 3, 2014. His total tax
liability was $5,000; the return showed a net refund due of $75. He filed late
because he was in Vegas with his old fraternity buddies. What amount of
late-filing penalty will he owe for the 2013 tax year?
$2,500
$150
$0
$75 (General Feedback:
Chapter 18, page 576. The IRS does not assess a penalty if
no tax is due. )
Comments:
Question 3. Question
: (TCO 8) Mr. and Mrs. Lee filed
a complete and accurate return for 2013 on April 14, 2014. When will the
statute of limitations expire for their 2013 return?
April 15, 2019
April 15, 2017
August 15, 2016
October 14, 2015 (General Feedback:
Chapter 18. The IRS has 3 years from the later of the April
15 due date or the date the return was actually filed.)
Comments:
Question 4. Question
: (TCO 8) Which of the following
is generally considered an indication that Ken has committed tax fraud?
Ken made major addition errors.
Ken’s business records and documents were
destroyed in a flood.
Ken does not have any receipts for large
deductions taken on his tax return.
Ken employed a CPA to prepare his tax return.
(General Feedback:
Chapter 18, page 580)
Comments:
Question 5. Question
: (TCO 8) Which of the following
statements concerning the innocent spouse rule is/are true?
All of the above
The tax deficiency in question must be
attributable to the omission of gross income or the claim of bogus deductions
or credits made by both spouses on their joint return.
The innocent spouse must show that he or she
did not know, and had no reason to know, that the return understated the joint
federal tax liability.
A spouse is generally relieved of the
additional tax liability to the extent that he or she did NOT significantly
benefit from the omitted income and was ignorant of the omission. (General
Feedback:
Chapter 18, pages 587–588)
Comments:
