Taxation MCQs

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Steve and Kay Briar, US citizens, were married for the entire 2012 calendar year. In 2012, Steve gave a $30,000 cash gift to his sister. The Briars ...






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In 2012, Sayers, who is single, gave an outright gift of $50,000 to a friend, Johnson, who needed the money to pay medical expenses. In filing the 2...






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During 2013, Blake transferred a corporate bond with a face amount and fair market value of $20,000 to a trust for the benefit of her sixteen-year o...






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Under the unified rate schedule for 2013,






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Which of the following requires filing a gift tax return, if the transfer exceeds the available annual gift tax exclusion?






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On July 1, 2012, Vega made a transfer by gift in an amount sufficient to require the filing of a gift tax return. Vega was still alive in 2013. If V...






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When Jim and Nina became engaged in April 2012, Jim gave Nina a ring that had a fair market value of $50,000. After their wedding in July 2012, Jim ...






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Raff created a joint bank account for himself and his friend’s son, Dave. There is a gift to Dave when






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Fred and Ethel (brother and sister), residents of a noncommunity property state, own unimproved land that they hold in joint tenancy with rights of ...






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Bell, a cash-basis calendar-year taxpayer, died on June 1, 2012. In 2012, prior to her death, Bell incurred $2,000 in medical expenses. The executor...






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If the executor of a decedent’s estate elects the alternate valuation date and none of the property included in the gross estate has been sold or ...






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What amount of a decedent’s taxable estate is effectively taxfree if the maximum basic exclusion amount is taken during 2013?






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Which of the following credits may be offset against the gross estate tax to determine the net estate tax of a US citizen dying during 2013? Applic...






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Fred and Amy Kehl, both US citizens, are married. All of their real and personal property is owned by them as tenants by the entirety or as joint te...






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In connection with a ’buy-sell’ agreement funded by a cross-purchase insurance arrangement, business associate Adam bought a policy on Burr’s ...






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Following are the fair market values of Wald’s assets at the date of death: Personal effects and jewelry $1,750,000 Land bought by Wald with Wald...






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Which one of the following is a valid deduction from a decedent’s gross estate?






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Eng and Lew, both US citizens, died in 2013. Eng made taxable lifetime gifts of $400,000 that are not included in Engs gross estate. Lew made no li...






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With regard to the federal estate tax, the alternate valuation date






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Which of the following forms of business organization is directly subject to tax?






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Ross, a calendar-year, cash-basis taxpayer who died in June 2012, was entitled to receive a $10,000 accounting fee that had not been collected befor...






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Alan Curtis, a US citizen, died on March 1, 2013, leaving an adjusted gross estate with a fair market value of $5,400,000 at the date of death. Unde...






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Alan Curtis, a US citizen, died on March 1, 2013, leaving an adjusted gross estate with a fair market value of $5,400,000 at the date of death. Unde...






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In 2006, Edwin Ryan bought 100 shares of a listed stock for $5,000. In June 2012, when the stock’s fair market value was $7,000, Edwin gave this s...






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In 2006, Edwin Ryan bought 100 shares of a listed stock for $5,000. In June 2012, when the stock’s fair market value was $7,000, Edwin gave this s...






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For 2013, the generation-skipping transfer tax is imposed






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For 2013, the generation-skipping transfer tax is imposed






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Under the terms of the will of Melvin Crane, $10,000 a year is to be paid to his widow and $5,000 a year is to be paid to his daughter out of the es...






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A distribution from estate income, that was currently required, was made to the estates sole beneficiary during its calendar year. The maximum amou...






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With regard to estimated income tax, estates






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A complex trust is a trust that






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The 2012 standard deduction for a trust or an estate in the fiduciary income tax return is






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Ordinary and necessary administration expenses paid by the fiduciary of an estate are deductible






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An executor of a decedent’s estate that has only US citizens as beneficiaries is required to file a fiduciary income tax return, if the estate’s...






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The charitable contribution deduction on an estate’s fiduciary income tax return is allowable






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On January 2, 2013, Carlt created a $300,000 trust that provided his mother with a lifetime income interest starting on January 2, 2013, with the re...






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For income tax purposes, the estate’s initial taxable period for a decedent who died on October 24






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The private foundation status of an exempt organization will terminate if it






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Which of the following exempt organizations would be eligible to satisfy its annual filing requirement by filing Form 990-N (e-Postcard)?






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To qualify as an exempt organization other than a church or an employees’ qualified pension or profit-sharing trust, the applicant






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To qualify as an exempt organization, the applicant






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Carita Fund, organized and operated exclusively for charitable purposes, provides insurance coverage, at amounts substantially below cost, to exempt...






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The filing of a return covering unrelated business income






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A condominium management association wishing to be treated as a homeowners association and to qualify as an exempt organization for a particular yea...






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An organization wishing to qualify as an exempt organization






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Which one of the following statements is correct with regard to exempt organizations?






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To qualify as an exempt organization, the applicant






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To qualify as an exempt organization,






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Hope is a tax-exempt religious organization. Which of the following activities is (are) consistent with Hope’s tax-exempt status? I. Conducting w...






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The organizational test to qualify a public service charitable entity as tax-exempt requires the articles of organization to I. Limit the purpose of...






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Which of the following activities regularly conducted by a tax-exempt organization will result in unrelated business income? I. Selling articles mad...






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Which one of the following statements is correct with regard to unrelated business income of an exempt organization?






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Which of the following activities regularly carried out by an exempt organization will not result in unrelated business income?






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If an exempt organization is a corporation, the tax on unrelated business taxable income is






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During 2012, Help, Inc., an exempt organization, derived income of $15,000 from conducting bingo games. Conducting bingo games is legal in Help’s ...






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Which of the following statements is correct regarding the unrelated business income of exempt organizations?






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An incorporated exempt organization subject to tax on its 2012 unrelated business income






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If an exempt organization is a charitable trust, then unrelated business income is






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With regard to unrelated business income of an exempt organization, which one of the following statements is true?






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Miramar Corp. has total business income of $1 million, and in State XY has a sales factor of 60%, a payroll factor of 50%, and a property factor of ...






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Miramar Corp. has total business income of $1 million, and in State XY has a sales factor of 60%, a payroll factor of 50%, and a property factor of ...






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Which one of the following statements regarding the foreign operations of Glencoe Corporation (a domestic corporation) is correct?






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For the current year, Crocker Corp., a domestic corporation, has US taxable income of $700,000, which includes $100,000 from a foreign division. Cro...






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For the current year, Crocker Corp., a domestic corporation, has US taxable income of $700,000, which includes $100,000 from a foreign division. Cro...






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The following information pertains to Raubolt Corporation’s operations for the current year: Worldwide taxable income $300,000 US source taxable ...






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When an entity changes its method of accounting for income taxes, which has a material effect on comparability, the auditor should refer to the chan...






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Which from the following is NOT among the heads of “Total Income”?






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Custom duty is levied on goods I. imported into Pakistan II. exported from Pakistan III. transported through Pakistan






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Excise duties are levied on a limited number of goods manufactured, and services provided _____ Pakistan.






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All exports are liable to _____ Federal Excise Duty.






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Which from the following is/are considered as “Good(s)”?






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Which Section of the Sales Tax Act 1990 stipulates the goods that are exempt from levy of sales tax?






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Which Schedule of Section 13 of the Sales Tax Act 1990 includes a list of items on which no sales tax is levied?






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Sales Tax is levied at the rate of _____ on all goods imported into Pakistan.






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The sales tax on goods imported into Pakistan is paid by the






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All supplies made in Pakistan by a registered person in the course of any business carried on by him, is liable to pay __________ sales tax.






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Identify from the following cases where married person’s allowance will be granted to the taxpayer who files the tax return for the year of assessme...






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Under the Inland Revenue Ordinance, which of the following is/are grounds for a taxpayer to apply to an assessor for correction of errors in a tax re...






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XYZ Limited is considering providing medical benefits to its employees. Which of the following ways of providing such benefits will be efficient to t...






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Proceeds of a life insurance policy payable to the estate’s executor, as the estate’s representative, are






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Which of the following is a complete list of the primary types of income that are applicable to general business activity?






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Which of the following situations does not reflect all of the key variables to be considered in the business decision process?






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Which of the following would not be a responsibility of a functional manager.






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Which of the following would not be an efficient management approach to taxation?






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Which of the following does not correctly describe a fundamental rule in determining employment income?






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Which of the following is not a condition for the taxation of maintenance payments received from a former spouse?






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Which of the following does not correctly describe a condition for the deductibility of moving expenses?






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Which of the following types of income should be included in earned income when calculating an individual’s RRSP contribution limit?






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When is it mandatory to convert all of an RRSP’s funds to a pension vehicle?






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Which of the following rules would apply to a vendor who is not dealing at arm’s length with a purchaser?






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A student had income from a RESP for $12,000, a scholarship for $5,000, a prize for achievement in a field of endeavour for $1,500 and a research gran...






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An individual received monthly payments of $500 as alimony and $1,000 as child maintenance for 2 children from a former spouse pursuant to a court ord...






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In 20X1, an individual had employment income of $73,000, a rental loss of $5,000 and interest income of $2,000. The employer and employee each made a ...






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An individual sold two pieces of land with a fair market value of $30,000 each and an original cost of $25,000 each. She sold one to her related corpo...






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A manufacturing business owner is considering the sale of the business with assets in inventory, land, building, equipment and goodwill. Which of thes...






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Which of the following does not correctly describe the primary relationship between a corporation and a shareholder.






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Which of following special reductions of net income does not apply to a corporation?






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As a result of a change in control to an unrelated party, there are limits on loss carry-overs. Which of the following does not correctly describe one...






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Which of the following corporate taxes is refundable upon certain criteria being satisfied?






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Which of the following corporate tax reductions apply to all levels of taxable income of a Canadian-controlled private corporation?