South-Western Federal Taxation 2022: Individual Income Taxes 45th edition by James C. Young Test ban

 a. True
 b. False
 
ANSWER:  True
 
86. Bracket creep will not exist if there is only a single (flat) tax rate for the income tax.
 a. True
 b. False
 
ANSWER:  True
 
Multiple Choice
 
87. Which, if any, of the following statements best describes the history of the Federal income tax?
 a. It did not exist during the Civil War.
 b. The Federal income tax on corporations was held by the U.S. Supreme Court to be allowable under the U.S. Constitution.
 c. The Federal income tax on individuals was held by the U.S. Supreme Court to be allowable under the U.S. Constitution.
 d. Both the Federal income tax on individuals and on corporations was held by the U.S. Supreme Court to be contrary to the U.S. Constitution.
 
ANSWER:  b
 
88. Which, if any, is not one of Adam Smith’s canons (principles) of taxation?
 a. Economy in collection
 b. Certainty
 c. Convenience of payment
 d. Simplicity
 
ANSWER:  d
 
89. Which, if any, of the following taxes are regressive (rather than progressive)?
 a. State general sales tax
 b. Federal individual income tax
 c. Federal estate tax
 d. Federal gift tax
 
ANSWER:  a
 
90. Which, if any, of the following transactions will increase a taxing jurisdiction’s revenue from the ad valorem tax imposed on real estate?
 a. A resident dies and leaves his farm to his church.
 b. A large property owner issues a conservation easement as to some of her land.
 c. A tax holiday issued 10 years ago has expired.
 d. A bankrupt motel is acquired by the Red Cross and is to be used to provide housing for homeless persons.
 e. None of these.
 
ANSWER:  c
 
91. Which, if any, of the following transactions will decrease a taxing jurisdiction’s ad valorem tax revenue imposed on real estate?
 a. A tax holiday is granted to an out-of-state business that is searching for a new factory site.
 b. An abandoned church is converted to a restaurant.
 c. A public school is razed and turned into a city park.
 d. A local university sells a dormitory that will be converted for use as an apartment building.
 
ANSWER:  a
 
92. Which, if any, of the following is a typical characteristic of an ad valorem tax on personalty?
 a. Taxpayer compliance is greater for personal use property than for business use property.
 b. The tax on automobiles sometimes considers the age of the vehicle.
 c. Most states impose a tax on intangibles.
 d. The tax on intangibles generates considerable revenue since it is difficult for taxpayers to avoid.
 
ANSWER:  b
 
93. Federal excise taxes that are no longer imposed include:
 a. Tax on air travel.
 b. Tax on wagering.
 c. Tax on alcohol.
 d. None of these.
 
ANSWER:  d
 
94. Taxes not imposed by the Federal government include:
 a. Tobacco excise tax.
 b. Customs duties (tariffs on imports).
 c. Tax on rental cars.
 d. Gas guzzler tax.
 
ANSWER:  c
 
95. Taxes levied by both states and the Federal government include:
 a. General sales tax.
 b. Customs duties.
 c. Hotel occupancy tax.
 d. None of these.
 
ANSWER:  d
 
96. Taxes levied by all states include:
 a. Tobacco excise tax.
 b. Individual income tax.
 c. Inheritance tax.
 d. General sales tax.
 
ANSWER:  a
 
97. A use tax is imposed by:
 a. The Federal government and all states.
 b. The Federal government and a majority of the states.
 c. All states but not the Federal government.
 d. Most of the states but not the Federal government.
 
ANSWER:  d
 
98. Gabriele and Lisa are married and live in a common law state. They want to make gifts to their four children in 2021. What is the maximum amount of the annual exclusion they will be allowed for these gifts?
 a. $15,000.
 b. $30,000.