Question 1

Briana lives in one state and works in the adjoining state. Both states tax the income she earns from her job. Does Briana have any relief from this apparent double taxation of the same income?

Accepted Answer

The answer of Briana lives in one state and works...

Question 2

What are the pros and cons of the following state and local tax provisions?
a. An ad valorem property tax holiday made available to a manufacturing plant that is relocating.
b. Hotel occupancy tax and a rental car surcharge.
c. A back-to-school sales tax holiday.

Accepted Answer

The answer of What are the pros and cons of...

Question 3

In late June 2014, Art is audited by the state and a large deficiency is assessed. In November of the same year, his Federal income tax return is audited by the IRS. What has probably happened?

Accepted Answer

The answer of In late June 2014, Art is audited...

Question 4

Tracy has just been audited and the IRS agent has issued an RAR that assesses a large deficiency. Since Tracy disagrees with the result, her next step is to go to court. Do you agree?

Accepted Answer

The answer of Tracy has just been audited and the...

Question 5

Morgan inherits her father's personal residence including all of the furnishings. She plans to add a swimming pool and sauna to the property and rent it as a furnished house. What are some of the ad valorem property tax problems Morgan can anticipate?

Accepted Answer

The answer of Morgan inherits her father's personal residence including...

Question 6

Due to the population change, the Goose Creek School District has decided to close one of its high schools. Since it has no further need of the property, the school is listed for sale. The two bids it receives are as follows:
United Methodist Church $1,700,000
Planet Motors 1,600,000
The United Methodist Church would use the property to establish a sectarian middle school. Planet, a well-known car dealership, would revamp the property and operate it as a branch location.
If you were a member of the School District board, what factors would you consider in evaluating the two bids?

Accepted Answer

The answer of Due to the population change, the Goose...

Question 7

State and local governments are sometimes forced to find ways to generate additional revenue. Comment on the pros and cons of the following procedures:
a. Decouple what would be part of the piggyback format of the state income tax.
b. Tax amnesty provisions.
c. Internet shaming.

Accepted Answer

The answer of State and local governments are sometimes forced...

Question 8

The Federal income tax is based on a pay­as­you­go system and has become a "mass tax." Explain this statement.

Accepted Answer

The answer of The Federal income tax is based on...

Question 9

Rick, the sole proprietor of an adult entertainment club, is audited by the IRS. On the third day of the field audit, the regular IRS agent is accompanied by a special agent. Should Rick be concerned by this new development? Explain.

Accepted Answer

The answer of Rick, the sole proprietor of an adult...

Question 10

With regard to state income taxes, explain what is meant by the "jock tax"?

Accepted Answer

The answer of With regard to state income taxes, explain...

Question 11

Paige is the sole shareholder of Citron Corporation. During the year, Paige leases a building to Citron for a monthly rental of $80,000. If the fair rental value of the building is $60,000, what are the income tax consequences to the parties involved?

Accepted Answer

The answer of Paige is the sole shareholder of Citron...

Question 12

Two months after the burglary of his personal residence, Eric is audited by the IRS. Among the items taken in the burglary was a shoe box containing approximately $50,000 in cash. Eric is the owner and operator of a cash-and- carry liquor store. Eric wonders why he was audited. Can you help explain?

Accepted Answer

The answer of Two months after the burglary of his...

Question 13

What is the difference between an inheritance tax and an estate tax? Who imposes these taxes?

Accepted Answer

The answer of What is the difference between an inheritance...

Question 14

In 1985, Roy leased real estate to Drab Corporation for 20 years. Drab Corporation made significant capital improvements to the property. In 2005, Drab decides not to renew the lease and vacates the property. At that time, the value of the improvements is $800,000. Roy sells the real estate in 2014 for $1,200,000 of which $900,000 is attributable to the improvements. When is Roy taxed on the improvements made by Drab Corporation?

Accepted Answer

The answer of In 1985, Roy leased real estate to...

Question 15

In terms of Adam Smith's canons of taxation, how does the Federal income tax fare as far as economy is concerned?

Accepted Answer

The answer of In terms of Adam Smith's canons of...

Question 16

In 2012, Deborah became 65 years old. In 2013 she added a swimming pool, and in 2014 she converted the residence to rental property and moved into an assisted living facility. Since 2011, Deborah's ad valorem property taxes have decreased once and increased twice. Explain.

Accepted Answer

The answer of In 2012, Deborah became 65 years old....

Question 17

A lack of compliance in the payment of use taxes can be resolved by several means. In this regard, comment on the following:
a. Registration of automobiles.
b. Reporting of Internet purchases on state income tax returns.

Accepted Answer

The answer of A lack of compliance in the payment...

Question 18

What is a severance tax? How productive can it be in terms of generating revenue?

Accepted Answer

The answer of What is a severance tax? How productive...

Question 19

Virtually all state income tax returns contain checkoff boxes for donations to various causes. On what grounds has this procedure been criticized?

Accepted Answer

The answer of Virtually all state income tax returns contain...

Question 20

Logan dies with an estate worth $20 million. Under his will, $10 million passes to his wife while $10 million goes to his church. What is Logan's Federal estate tax result?

Accepted Answer

The answer of Logan dies with an estate worth $20...

Quiz 1: An Introduction to Taxation and Understanding the Federal Tax Law

Briana lives in one state and works in the adjoining state. Both states tax the income she earns from her job. Does Briana have any relief from this apparent double taxation of the same income?

What are the pros and cons of the following state and local tax provisions? a. An ad valorem property tax holiday made available to a manufacturing plant that is relocating. b. Hotel occupancy tax and a rental car surcharge. c. A back-to-school sales tax holiday.

In late June 2014, Art is audited by the state and a large deficiency is assessed. In November of the same year, his Federal income tax return is audited by the IRS. What has probably happened?

Tracy has just been audited and the IRS agent has issued an RAR that assesses a large deficiency. Since Tracy disagrees with the result, her next step is to go to court. Do you agree?

Morgan inherits her father's personal residence including all of the furnishings. She plans to add a swimming pool and sauna to the property and rent it as a furnished house. What are some of the ad valorem property tax problems Morgan can anticipate?

State and local governments are sometimes forced to find ways to generate additional revenue. Comment on the pros and cons of the following procedures: a. Decouple what would be part of the piggyback format of the state income tax. b. Tax amnesty provisions. c. Internet shaming.

The Federal income tax is based on a payasyougo system and has become a "mass tax." Explain this statement.

Rick, the sole proprietor of an adult entertainment club, is audited by the IRS. On the third day of the field audit, the regular IRS agent is accompanied by a special agent. Should Rick be concerned by this new development? Explain.

With regard to state income taxes, explain what is meant by the "jock tax"?

Paige is the sole shareholder of Citron Corporation. During the year, Paige leases a building to Citron for a monthly rental of $80,000. If the fair rental value of the building is $60,000, what are the income tax consequences to the parties involved?

Two months after the burglary of his personal residence, Eric is audited by the IRS. Among the items taken in the burglary was a shoe box containing approximately $50,000 in cash. Eric is the owner and operator of a cash-and- carry liquor store. Eric wonders why he was audited. Can you help explain?

What is the difference between an inheritance tax and an estate tax? Who imposes these taxes?

In terms of Adam Smith's canons of taxation, how does the Federal income tax fare as far as economy is concerned?

In 2012, Deborah became 65 years old. In 2013 she added a swimming pool, and in 2014 she converted the residence to rental property and moved into an assisted living facility. Since 2011, Deborah's ad valorem property taxes have decreased once and increased twice. Explain.

A lack of compliance in the payment of use taxes can be resolved by several means. In this regard, comment on the following: a. Registration of automobiles. b. Reporting of Internet purchases on state income tax returns.

What is a severance tax? How productive can it be in terms of generating revenue?

Virtually all state income tax returns contain checkoff boxes for donations to various causes. On what grounds has this procedure been criticized?

Logan dies with an estate worth $20 million. Under his will, $10 million passes to his wife while $10 million goes to his church. What is Logan's Federal estate tax result?

Quiz 1: An Introduction to Taxation and Understanding the Federal Tax Law

Briana lives in one state and works in the adjoining state. Both states tax the income she earns from her job. Does Briana have any relief from this apparent double taxation of the same income?

What are the pros and cons of the following state and local tax provisions? a. An ad valorem property tax holiday made available to a manufacturing plant that is relocating. b. Hotel occupancy tax and a rental car surcharge. c. A back-to-school sales tax holiday.

In late June 2014, Art is audited by the state and a large deficiency is assessed. In November of the same year, his Federal income tax return is audited by the IRS. What has probably happened?

Tracy has just been audited and the IRS agent has issued an RAR that assesses a large deficiency. Since Tracy disagrees with the result, her next step is to go to court. Do you agree?

Morgan inherits her father's personal residence including all of the furnishings. She plans to add a swimming pool and sauna to the property and rent it as a furnished house. What are some of the ad valorem property tax problems Morgan can anticipate?

State and local governments are sometimes forced to find ways to generate additional revenue. Comment on the pros and cons of the following procedures: a. Decouple what would be part of the piggyback format of the state income tax. b. Tax amnesty provisions. c. Internet shaming.

The Federal income tax is based on a pay­as­you­go system and has become a "mass tax." Explain this statement.

Rick, the sole proprietor of an adult entertainment club, is audited by the IRS. On the third day of the field audit, the regular IRS agent is accompanied by a special agent. Should Rick be concerned by this new development? Explain.

With regard to state income taxes, explain what is meant by the "jock tax"?

Paige is the sole shareholder of Citron Corporation. During the year, Paige leases a building to Citron for a monthly rental of $80,000. If the fair rental value of the building is $60,000, what are the income tax consequences to the parties involved?

What is the difference between an inheritance tax and an estate tax? Who imposes these taxes?

In terms of Adam Smith's canons of taxation, how does the Federal income tax fare as far as economy is concerned?

In 2012, Deborah became 65 years old. In 2013 she added a swimming pool, and in 2014 she converted the residence to rental property and moved into an assisted living facility. Since 2011, Deborah's ad valorem property taxes have decreased once and increased twice. Explain.

A lack of compliance in the payment of use taxes can be resolved by several means. In this regard, comment on the following: a. Registration of automobiles. b. Reporting of Internet purchases on state income tax returns.

What is a severance tax? How productive can it be in terms of generating revenue?

Virtually all state income tax returns contain checkoff boxes for donations to various causes. On what grounds has this procedure been criticized?

Logan dies with an estate worth $20 million. Under his will, $10 million passes to his wife while $10 million goes to his church. What is Logan's Federal estate tax result?

The Federal income tax is based on a payasyougo system and has become a "mass tax." Explain this statement.