Acct Tax Essay Example
–exam1-01/02/2012
Questions 1 thru 5 are True or False, 6 thru 11 are multiple choice
1) The marginal tax rate is useful in tax planning because it measures the tax effect of a proposed transaction. True.
2) If a taxpayer's total tax liability is $30,000, taxable income is $100,000; the average tax rate is 30 percent. True. The average tax = total federal income tax divided by taxable income
3) S Corporations (pass thru entities) result in a single level of taxation. (Are not taxed twice) True. The income of an S corporation is generally subject to just one level of tax.
4) Taxpayers have the choice of claiming either the personal and dependency exemption or the standard deduction. False. The standard deduction vs. itemized deduction. 5) An individual who is claimed as a dependent by another person is not entitled to a personal exemption on his or her own return. True.
6) All of the following items are generally excluded from income except A) child support payments. B) interest on corporate bonds. C) interest on state and local government bonds. (Municipal interest) D) life insurance proceeds paid by reason of death.
7) All of the following items are included in gross income except A) alimony received. B) rental income. (from rental property you own) C) interest earned on a bank account. D) child support payments received. 8) All of the following items are deductions for adjusted gross income except A) alimony paid. B) moving expenses. C) student loan interest. D) real estate taxes. 9) All of the following items are deductions from adjusted gross income except A) itemized deductions. B) standard deduction. Mariana Talos –exam1-01/02/2012
C) personal exemptions. D) IRA deductions. 10) Edward, a widower whose wife died in 2008, maintains a household for himself and his daughter who qualifies as his dependent. Edward's most favorable filing status for
Questions 1 thru 5 are True or False, 6 thru 11 are multiple choice
1) The marginal tax rate is useful in tax planning because it measures the tax effect of a proposed transaction. True.
2) If a taxpayer's total tax liability is $30,000, taxable income is $100,000; the average tax rate is 30 percent. True. The average tax = total federal income tax divided by taxable income
3) S Corporations (pass thru entities) result in a single level of taxation. (Are not taxed twice) True. The income of an S corporation is generally subject to just one level of tax.
4) Taxpayers have the choice of claiming either the personal and dependency exemption or the standard deduction. False. The standard deduction vs. itemized deduction. 5) An individual who is claimed as a dependent by another person is not entitled to a personal exemption on his or her own return. True.
6) All of the following items are generally excluded from income except A) child support payments. B) interest on corporate bonds. C) interest on state and local government bonds. (Municipal interest) D) life insurance proceeds paid by reason of death.
7) All of the following items are included in gross income except A) alimony received. B) rental income. (from rental property you own) C) interest earned on a bank account. D) child support payments received. 8) All of the following items are deductions for adjusted gross income except A) alimony paid. B) moving expenses. C) student loan interest. D) real estate taxes. 9) All of the following items are deductions from adjusted gross income except A) itemized deductions. B) standard deduction. Mariana Talos –exam1-01/02/2012
C) personal exemptions. D) IRA deductions. 10) Edward, a widower whose wife died in 2008, maintains a household for himself and his daughter who qualifies as his dependent. Edward's most favorable filing status for