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| You have $20,000 invested in an IRA at 12% for 30 years. Using the rule of 72, how much will you have at the end of that period? |
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Term
The sales tax is...
a. technically regressive and popularly porportional
b. popularly regressive and technically porportional
c. technically porportional and popularly proportional
d. popularly regressive and technically progressiv
e. None of the above |
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Definition
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Term
The income effect suggests that raising tax rates will
a. decrease work effort by affected taxpayers
b. increase work effort by affected taxpayers
c. increase saving by affected taxpayres
d. none of the above. |
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Definition
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Term
| A corporation would pay how much income tax on $2 million of taxable income? |
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Definition
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Term
Bob and Jill both earn $25,000. Bob pays $2,500 in tax and Jill pays $2,600 in tax. The diference in tax liabilities appear to violate the concept of
a. sufficiency
b. vertical equity
c. efficiency
d. horizontal equity
e. the substituion effect |
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Definition
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Term
| What court can allow a jury trial? |
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Definition
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Term
| What cour allows a taxpayer to sue even though he or she cannot pay the tax due? |
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Definition
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Term
Tax payer speands $30 on fertilizer and water for her orange trees. She harvests $100 worth of oranges. She eats $40 worth adn sells the rest for $60 at a roadside stand.
Economic Income?
Realized Income? |
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Definition
Economic Income: $70
Realized Income $42 |
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Term
The tax rate on corporate taxable income in the Federated Republic of Yesterday is
Taxable income: Tax Rate:
0~$25,000 22%
25,000~ 48%
Based on this, we can assume they are( proportional, progressive, Regressive, Horizontally inequitable)
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Definition
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Term
The realization rule we memorized suggests that a realization event has occurred in all of the following cases except
a. taxpayer finds $100 bill on the sidewalk
b. taxpayer discovers a treasure chest buried on his property
c.taxpayer gives two old cars to his next door neighbor in exchange for a newer car
d. taxpayer buys an oil painting at a garage sale for $50. It is later appraised at $2,000
e. none of the above |
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Definition
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Term
For income tax purposes, in which of the following cases is income realized?
a. buyer purchases a building by assumption of the seller's debt.
b. property transferred from division A to division B of Company X. The property has appreciated by $10,000
c. Value of stock increases to over 200% of its original cost
d. both a and b
e. none of the above |
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Definition
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Term
| Deductions are all owed for trade or business expenditures that are _______, ___________, and, ______________. |
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Definition
| Ordinary, necessary, reasonable in amount |
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Term
| In addition to the deduction test, there are four negative conditions. Name the four. |
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Definition
1. not be for personal, family, or living expenses
2. capitilized
3. tax excempt income production
4. contrary to public policy |
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Term
| George found a diamond ring on the beach. A jeweler appraised it at $3,000 and offered George that amount for the ring. George solid it to his sister for $2,500. George has income of how much? |
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Definition
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Term
| George sold stock (fair market value $9,000 basis $10,000) to his brother John for $9,000. What amount of loss may George take? |
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Definition
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Term
George sold stock (fair market value $9,000 basis $10,000) to his brother John for $9,000.
John sold the stock for $13,000 six months later What amount of gain will John Report?
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Definition
$3,000
$13,000-$9,000=$4,000-$1,000 dollar loss=3,000 |
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Term
| Taxpayer invested in tax exempt bonds yielding 7% when she could have invested in taxable bonds yielding 10%. Economists do not consider such bonds to be truly tax-free. They suggest that is an ____________ tax. |
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Definition
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Term
Assume that I purchased a new Porsche for $100,000, drove it for six months (at which time it had a value of $70,000), and then converted it to business use. During the subsequent years of business use, a total of $8,000 of depreciation was taken.
1. A sale for $55,000 would produce how much loss?
2 A sale at $90,000 would produce how much gain? |
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Definition
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Term
| Taxpayer T invests $60,000 in taxable bonds. Assume the bonds have a 12% return and reinvestment of all net proceeds in identical yields. T's effective tax rate on this investment is 25%. Using the Rule of 72 how much will T have at the end of 24 years. |
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Definition
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Term
| John's daughter Ruth is attending college. John has instructed the tenants of a rental house he owns to send the $500 per month rental checks to Ruth for the next four years. They sent $2,000 of the rent check to Ruth during the year and $4,000 to John will report $6,000 of rental income from the property due to the _________ ______________ doctorine |
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Definition
| Assignment of Income Doctorine |
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Term
| The sales tax is technically ______ and popularly _____________/ |
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Definition
technically porportional
popularly regressive |
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Term
The U. S. income tax is
a. regressive
b. proportional
c. progressive
d. none of the above |
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Definition
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Term
| A corporation would pay how much income tax on $150,000 of taxable income? |
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Definition
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Term
| A corporation would pay how much income tax on $1 million of taxable income? |
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Definition
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Term
| An appeal from a District Court in Arizona would go to what court? |
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Definition
| Circuit Court of Appeals (technically the 9th) |
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Term
| The Internal Revenue Service is a division of the ______ |
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Definition
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Term
| The realization rule says that you have a realization if : |
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Definition
| There is any change in the form or substance of your property or property rights and another tax payer is involved |
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Term
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Definition
| people in equal position should pay the same amount |
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Term
| How much tax will be paid by a C corporation wiht $150,000 of taxable income? |
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Definition
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Term
| How much tax will be paid by an S corporation wiht $100,000 of income? |
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Definition
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Term
| You give an old pickup truck (worth $500) to Dr. John, your dentist, in exchange for several fillings. You paid $800 for hte vehicle six months agao. Dr. John usually charges $600 for this work. What is Dr. John's income from this transaction? |
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Definition
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Term
| A tax exempt bond pays 6% while a fully taxable bond pays 8%. The difference of 2% is termed an ______ tax. |
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Definition
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Term
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Definition
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Term
| Using the rule of 72, what amount will you have after 30 years if you ivest $5,000 at 12% in a Roth IRA |
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Definition
$160,000
year 0: 5,000
year 6: 10,000
year 12: 20,000
year 18: 40,000
year 24: 80,000
year 30: 160,000 |
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Term
| If I sell stock (basis $10,000, FMV $6,000) to my son I cannot take the loss because of our relationship. If I sell the stock to a third party who then sells the stock to my son, I cannot take the loss becasue of the _______ ________ doctrine. |
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Definition
| Step transaction doctrine |
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Term
| A taxpayer who disagrees wiht a IRS may file for review by a court. If the taxpayer cannot afford to pay the tax first, he or she can file in _______ Court |
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Definition
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Term
| The normal statute of limitations is 3 year. If a taxpayer omits more than 25% of gross income the statute is automatically extended to ______ years. |
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Definition
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Term
| Andrew inherited $10,000 worth of stock from his father George. George paid $3,000 for the stock several years ago and the stock was worth $10,000 when he died . How much income must Andrew report? |
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Definition
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Term
| Mike owns 1,000 shares of Microsoft worth about$20,000. He paid $4,000 several years ago. Mike used the shares as security for a loan of $10,000. What amount of income must Mike report? |
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Definition
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Term
| Julie owed various creditors $80,000. Her assets totaled $70,000 when one of her creditors agreed to accept $10,000 as payment in full of a credit card balance of $22,000. How much income must Julie report? |
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Definition
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Term
| Your tenant paid $3,000 of rent on November 15th, 2009 for the months of November, December and January of 2010. Youa re an individual cash basis, calendar-year taxpayer. What mount of income must you report for 2009? |
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Definition
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Term
| Mary gave her son jack a small home that is rented out for $500 per month. She gave her son the house at the end of June 2009. She had already received the January through May rents totaling $2,500. Jack received the rents ($3,500) for the remainder of the year. How much income must Jack report? |
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Definition
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Term
| You receive a Christmas profit sharing bonus of $5,000 December 23, 2009. In January 2010 you are required to repay $2,000 because of an error in the profit calculation. What amount of income must you report for 2009? |
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Definition
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Term
| Chris and Pat were married for several years and have lived all their lives in Arizona. In October 2009 they separated and intend to file for divorce. Chris earned $36,000 in 2009 and Pat earned $48,000 in 2009. What amount of income must Chris report for 2009? |
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Definition
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Term
Robert lent his daugheter June $200,000 on an interest free demand loan in 2008. The loan was outstanding all of 2009. The AFR (applicable federal rate) was 6% for 2009. What amount of income does June have as a result of this transaction?
What if the lender were Junes employer instead of her father? |
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Definition
Father :$0
Employer: 12,000 |
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Term
| Social Security payments are taxable if the reipient has "too much" other income. What is the maximum portion of Social Security income that is subject to tax? |
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Definition
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Term
You receive a $1,000 state income tax refund in 2009. What amount is taxable to you if you itemized deduction and your itemization total was$3,000 more than the standard deduction?
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Definition
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Term
| TIy rented unimproved office space to a stockbroker for $3,000 a month in 2006. At the end of December 2009 the stockbroker retired and moved to Alaska leaving behind $40,000 of tenant improvements. What amount of income must you report for 2009? |
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Definition
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