True
TorF. When stock is sold after the date of declaration but before the record date, the buyer must recognize as income the dividend declared.
True
TorF. The constructive receipt doctrine requires that income must be recognized wen it is made available to the cash basis taxpayer, although it has not actually been received. The constructive receipt doctrine does not apply to accrual basis.
True
TorF. In 2006, Terry purchased land for $150,000. In 2015, Terry received $10,000 form a local cable television company in exchange for Terry allowing the company to run an underground cable across Terry's property. Terry is not required to recognize inco
True
TorF. In the case of a person with other income of $300,000, 15% of his or her Social Security benefits received are excluded form gross income.
True
TorF. Jessica is a cash basis taxpayer. When Jessica failed to repay a loan, the bank garnished her salary. Each week $60 was withheld form Jessica's salary and paid to the bank. Jessica is required to include the $60 each week in her gross income even th
False
TorF. Tom, a cash basis taxpayer, purchased a bond on March 31 for $10,000, plus $100 accrued interest. In December, Tom collected $500 interest from the bond. Tom's interest income from the bond for the year is $500.
False
TorF. If the employer provides all employees with group term life insurance equal to twice the employee's annual salary, an employee with a salary of $50,000 has no gross income from the life insurance protection provided by the employer.
True
TorF. The realization requirement gives an incentive to own assets that have increased in value and to sell assets whose value has decreased.
True
TorF. Susan purchased an annuity for $200,000. She is to receive $18,000 each year and her life expectancy is 13 years. If Susan collects under the annuity for 14 years, the entire $18,000 received in the 14th year must be included in her gross income.
True
TorF. In recent years, Congress has been relatively successful in simplifying the Internal Revenue Code.
False
TorF. The following citation is correct: Larry . Mitchell, 131 T.C. 215 (2008).
False
TorF. A letter ruling applies only to the taxpayer who asks for an obtains a letter ruling.
False
TorF. Temporary Regulations are only published in the Internal Revenue Bulletin.
False
TorF. The Golsen rule has been overturned by the U.S. Supreme Court.
False
TorF. The "petitioner" refers to the party agains whom a suit is brought.
True
TorF. The first codification of the tax law occurred in 1954.
False
TorF. The IRS is not required to make a letter ruling public.
False
TorF. The following citation can be a correct citation: Rev. Raul 95-271,1995,1995-64 I.R.B. 18.
False
TorF. The primary purpose of effective tax planning is to reduce or defer the tax in the current tax year.
False
TorF. In a U.S. District Court, a jury can decide both questions of fact and questions of law.
False
TorF. Surviving spouse filing status begins in the year in which the decreased spouse died.
True
TorF. After Ellie moves out of the apartment she had rented as her personal residence, she recovers her damage deposit of $1,00. The $1,000 is not income to Ellie
False
TorF. Once a chile reaches age 19, the kiddie tax no longer applies.
True
TorF. For the year a spouse dies, the surviving spouse is considered married for the entire year for income tax purposes.
True
TorF. Since an abandoned spouse is treated as not married and has one or more dependent children, he or she qualifies for the standard deduction available to the head of household.
True
TorF. The basic and additional standard deductions both are subject to an annual adjustments for inflation.
Ture
TorF. An "above the line" deduction refers to a deduction for AGI.
False
TorF. In terms of timing pas to any one year, the tax Tables are available before the Tax Rate Schedules.
True
TorF. Ed is divorced and maintains a home in which he and a dependent friend live. Ed does not qualify for head of household filing status.
True
TorF. The filing status of a taxpayer (e.g. Single, head of household) must be identified before the applicable standard deduction is determined.
False
TorF. Butch and Minerva are divorced in Dec. of 2015. Since they were married for more than 1/2 of the year, they are considered married to 2015.
True.
TorF. Currently, the top income tax rate in effect in not the highest it has ever been.
False
TorF. All exclusions from gross income are reported on Form 1040.
False
TorF. Stealth taxes are directed at lower income taxpayers.
True
TorF. A decrease in a taxpayer's AGI could increase the amount of medical expenses that can be deducted.
False
TorF. Gain on the sale of collectibles held for more than 12 months always is subject to a tax rate of 28%.
Fasle
TorF. Benjamin, age 16, is claimed as a dependent by his parents. During 2015, he earned $850 at a car wash. Benjamin's standard deduction is $1,400 (1,050+350).
False
TorF. Roy and Linda were divorced in 2014. The divorce decree awards custody of their children to Linda but is silent as to who is entitled to claim them as dependents. If Roy furnished more than half of their support, he can claim them as dependents in 2
True
TorF. If an individual does not spend funds that have been received form another source (e.g. Interest on municipal bonds), the I expended amounts are not considered for purposes of the support test.
True
TorF. After her divorce, Hope continues to support her ex-husband's sister, Cindy, who does not live with her. Hope can claim Cindy as a dependent.
True
TorF. Kim, a resident of Oregon, supports his parents who are residents of Canada but citizens of Korea. Kim can claim his parents as dependent.
True
TorF. Adjusted gross income appears at the bottom of page 1 and at the top of page 2 of Form 1040.
True
TorF. Stuart has a short-term capital loss, a collective long-term capital gain, and a long-term capital gain form land held as an investment. The short-term loss is first applied to the collectible capital gain.
True
TorF. Howard, age 82, dies on January 2, 2015. On Howard's final income tax return, the full amount of the basic and additional standard deductions will be allowed even though Howard lived for only 2 days during the year.
True
TorF. Darren, age 20 and not disabled, earns, $4,000 during 2015. Darren's parents cannot claim his as a dependent as a dependent unless he is a full-time student.
True
TorF. In Jan. 2015, Jake's wife dies and he does not remarry. For tax year 2015, Jake may not be able to use the filing status available to married persons filing joint returns.
False
TorF. Sarah furnishes more than 50% of the support of her son and daughter-in-law who live with her. If the son and daughter-in-law file a joint return, Sarah cannot claim them as dependents.
False
TorF. In 2015, Ed is 66 and single. If he has itemized deductions of $7,400, he should not claim the standard deduction alternative.
True
TorF. A taxpayer who itemizes must use Form 1040EZ or From 1040A.
False
TorF. Under the Federal income tax formula for individuals, a choice must be made between claiming deductions for AGI and itemized deductions.
False
TorF. Paula transfers stock to her former spouse, Fred. The transfer is pursuant to a divorce agreement. Paula's cost of the stock was $75,000 and its fair market value on the date of the transfer is $95,000. Fred later sells the stick for $100,000. Fred'
True
TorF. On Jan. 1, 2015, an accrual basis taxpayer entered into a contract to provide termite inspection service each month for 36 months. The amount received for the contract was $2,400. The taxpayer should report $1,600 of income in 2016.
True
TorF. Alimony recapture may occur if there is a substantial decrease in the amount of the alimony payments in the second year.
True
TorF. In the case of a gift loan of less than $100,000, the imputed interest rules apply if the donee has net investment income of over $1000.
False
TorF. Alvin is the sole shareholder of an s corporation that earned $200,000 in 2015 and distributed 75,000 to Alvin. Alvin must recognize $75,000 as income from the S corporation in 2015.
True
TorF. Judy is a cash basis attorney. In 2015, she performed services in connection with the formation of a corporation and received stock with a value of $4,000 for her services. By the end of the year, the value of the stock had decreased to $2,000. She
True
TorF. A sole proprietorship purchased an asset for $1,000 in 2015 and its value was $1,500 at the end of 2015. In 2016, the sole proprietorship sold the asset for $1,400. The sole proprietorship realized a taxable gain of $400 in 2016 but an economic loss
True
TorF. April, a calendar year taxpayer, is a 40% partner in Pale Partnership, whose fiscal year ends on September 30th. For the fiscal year ending 9/30/2015, the partnership had $400,000 net income and for FY ending 9/30/2016, the partnership had $300,000
True
TorF. The fact that the accounting method the taxpayer uses to measure income is consistent with GAAP does not assure that the method will be acceptable for tax purposes.
False
TorF. Barney painted his house which saved him $3,000. According to the realization requirement, Barney must recognize $3,000 of income.
False
TorF. Jacob and Emily were co-owners of a personal residence. As part of their divorce agreement, Emily paid Jacob cash for his interest in the personal residence. This cash payment results in a taxable gain to Jacob if he receives more cash than his shar
False
TorF. Mark is a cash basis taxpayer. He is partner in the M&M partnership, and his share of the partnership's profits for 2015 is $90,000. Only $40,000 was distributed to him in Jan. 2015, and this was his share of the 2014 partnership profits. None of th
True
TorF. A cash basis taxpayer purchased a certificate of deposit for $1,000 on July 1, 2014 that will pay $1,100 upon its maturity on June 30, 2016. The taxpayer must recognize a portion of the income in 2015.
True
TorF. The financial accounting principle of conservatism is not well-suited to the task of measuring taxable income.
True
TorF. Lois, who is single, received $9,000 of Social Security benefits. She also received $25,000 from dividends, interest, and her employer's pension plan. If Lois sells a capital asset that produces a $1,000 recognized loss, Lois's taxable income will d
False
TorF. Nicholas owned stock that decreased in value by $20,000 during the year, but he did not sell the stock. He earned $45,000 salary, but received only $34,000 because $11,000 in taxes were withheld. Nicholas saved $10,000 of his salary and used the rem
False
TorF. In December 2014, Mary collected the Dec. 2014 and January 2015 rent from a tenant. Mary is a cash basis taxpayer. The amount collected in Dec. 2014 and for the 2015 rent should be included in her gross income.
True
TorF. Nichole's employer pays her $150 per month towards the cost of parking near a railway station where Nicole catches the train to work. The employer pays the cost of the rail pass, $75 per month. Nicole can exclude both of these payments form her gros
True
TorF. Mia participated in a qualified state tuition program for the benefit of her son Michael. She contributed $15,000. When Michael entered college, the balance in the fund satisfied the tuition charges of 20,000. When the funds were withdrawn to pay co
True
TorF. Calvin miscalculated his I once in 2013 and overpaid his state income tax by 10,000. In 2015, he amended his 2013 state I once tax return and received a 10,000 refund and 900 interest. Calvin itemized his deductions in 2013, deducting 12,000 in stat
True
TorF. Benny loaned 100,000 to his controlled corporation. When it became apparent the corporation would not be able to repay the loan in the near future, Benny canceled the debt. the corporation should treat the cancellation as a nontaxable contribution t
True
TorF. A U.S. Citizen who works in France form Feb 2015 to Jan 2016, is eligible for the foreign earned income exclusion in 2015 and 2016.
True
TorF. In Dec. 2015, Emily, a cash basis taxpayer, received a 2,500 cash scholarship for the Spring semester of 2016. However she did not use the funds to pay the tuition until Jan 2016. Emily can exclude the 2,500 from her gross income in 2015.
False
TorF. Generally, a U.S. Citizen is required to include in gross income the salary as wages earned while working in a foreign country even if the foreign country taxes the income.