SOUTH-WESTERN FEDERAL TAXATION
2024 COMPREHENSIVE VOLUME 47TH
EDITION BY YOUNG, PERSELLIN,
NELLEN, MALONEY, CUCCIA, LASSAR,
CRIPE (TEST BANK LATEST EDITION
2023-24, GRADE A+, 100%) EXAM
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, Adjusted gross income (AGI) appears on page 1 of Form 1040.
True
A loss is not allowed for a security that declines in value.
True
Fred is a full-time teacher. He has written a book and receives royalties from it. Fred's mother, Mabel, is
age 65 and lives on her Social Security benefits and gifts from her son, Fred. This year Fred directed the
publisher to make the royalty check payable to Mabel because she needs the money for support. Fred
must include the amount of the royalty check in his gross income.
True
Arizona is in the jurisdiction of the Eighth Circuit Court of Appeals.
False
Neha, who is single, had itemized deductions totaling $20,000. She overpaid her 2-22 state income tax
and was entitled to a refund of $400 in 2023. Neha chooses to apply the $400 overpayment toward her
state income taxes for 2023. She is required to recognize that amount as income in 2023.
True
The cost of depreciable property is not a research and experimental expenditure.
True
Employee business expenses for travel may be deducted as itemized deductions if they are not
reimbursed.
False
For the year a spouse dies, the surviving spouse is considered married for the entire year for income tax
purposes.
True
The value added tax (VAT) has not had wide acceptance in the international community.
False
If startup expenses total $53,000, $51,000 of those costs are amortized over 180 months.
True
To potentially qualify the buyer for the previously-owned clean vehicle credit, the vehicle must be at
least two years older than it model year and have a sales price of $25,000 or less.
True
The Federal gas-guzzler tax applies only to automobiles manufactured overseas and imported into the
U.S.
, False
A self-employed taxpayer who uses the automatic mileage method to compute auto expenses can also
deduct the business portion of automobile club dues.
False
Certain hich-income individuals are subject to additional Medicare taxes on wages, uncared income, and
tax credits claim.
False
The basis of cost recovery property must be reduced by at least the cost recovery allowable.
True
In 2023, a child who has unearned income tax of $2,500 or less cannot be subject to the kiddie tax.
True
In determining whether an activity should be classified as a business or as a hobby, the satisfaction of
the presumption (i.e., profit in at least three out of the five years) ensures treatment as a business.
False
Mark is a cash basis taxpayer. He is a partner in the M&M partnership, and his share of the partnership's
profits for 2023 id $90,000. Only $40,000 was distributed to him in January 2023, and this was his share
if the 2022 partnership profits. None of the 2023 profits was distributed. Mark's gross income from the
partnership for 2023 in $40,000.
False
A taxpayer should always minimize their tax liability.
True
A provision in the law that compels accrual basis taxpayers to pay a tax on prepaid income in the year
received and not when earned is consistent with generally accepted accounting principles.
False
Letha incurred a $1,600 prepayment penalty to a lending institution because she paid off the mortgage
on her home early. The $1,600 is deductible as interest expense.
True
The Medicare component of the FICA tax (1.45% on wages) is progressive since the tax due increases as
wages increase.
False
Dan and Dona are married and file a separate returns for the year. If Dan itemizes his deduction from
AGI, Donna cannot claim the standard deduction.
