ACC 307 MidTerm Exam Part 1
1. A characteristic of FUTA is that:
2. Which of the following statements best describes the history of the Federal income tax?
3. Taxes not imposed by the Federal government include:
4. A VAT (value added tax):
5. Which of the following transactions will decrease a taxing jurisdiction’s ad valorem tax revenue imposed on real estate?
6. In 2013, Cindy had the following transactions:
7. Millie, age 80, is supported during the current year as follows:
8. Which of the following is a deduction for AGI?
9. Emily, whose husband died in December 2012, maintains a household in which her dependent mother lives. Which (if any) of the following is her filing status for the tax year 2013? (Note: Emily is the executor of her husband’s estate.)
10. Which of the following items is deductible?
11. Our tax laws encourage taxpayers to ____ assets that have appreciated in value and ____ assets that have declined in value.
12. Harry and Wanda were married in Texas, a community property state, but moved to Virginia, a common law state. The calculation of their income on a joint return:
13. Sarah, a majority shareholder in Teal, Inc., made a $200,000 interest-free loan to the corporation. Sarah is not an employee of the corporation.
14. The purpose of the tax rules that apply to below-market loans between family members is to:
15. Margaret owns land that appreciates at the rate of 10% each year. Ralph owns a zero coupon (i.e., all of the interest is paid at maturity but is taxed annually) corporate bond with a yield to maturity of 10%. At the end of 10 years, the bond will mature and the land will be sold. At the end of the 10 years,
16. The exclusion of interest on educational savings bonds:
17. Employees of the Valley Country Club are allowed to use the golf course without charge before and after working hours on Mondays, when the number of players on the course is at its lowest. Tom, an employee of the country club played 40 rounds of golf during the year at no charge when the non-employee charge was $20 per round.
18. The Royal Motor Company manufactures automobiles. Employees of the company can buy a new automobile for Royal’s cost plus 2%. The automobiles are sold to dealers at cost plus 20%. Generally, employees of Local Dealer, Inc., are allowed to buy a new automobile from the company at the dealer’s cost. Officers of Local Dealer are allowed to use a company vehicle (for personal use) at no cost.
19. Jena is a full-time undergraduate student at State University and is claimed by her parents as a dependent. Her only source of income is a $10,000 athletic scholarship ($1,000 for books, $5,500 tuition, $500 student activity fee, and $3,000 room and board). Jena’s gross income for the year is:
20. Olaf was injured in an automobile accident and received $25,000 for his physical injury, $50,000 for his loss of income, and $10,000 punitive damages. As a result of the award, the amount Olaf must include in gross income is: