SWFT Individual Income Taxes
43rd Edition
ISBN: 9780357391365
Author: YOUNG
Publisher: Cengage
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14) When examining revenue transactions, which of the following transactions is classified as an exchange transaction?
A) When a homeowner pays property taxes
B) When a university receives a federal grant that mandates a certain type of research activity
C) When an aquatic center receives cash for a group swim
D) When an employer deducts money for state tax withholding
Which of the following statements are TRUE?(i) Interest expense incurred on loan to purchase motor cars for salesmen’s use is deductible as the salesmen use the cars only for meetings with customers and suppliers.(ii) Expenses which qualify for special deduction under Section 14Q relates to capital expenditure which do not qualify for capital allowances claim.(iii) Donation of computers to institutions of public character by an individual is not deductible.
Which of the following will be considered as tax evasion?
Reducing tax by paying gift aid donations
Reducing tax by buying an electric car so that first year allowance is claimed
By not declaring a source of income and the actual income intentionally
By utilizing a loophole in the tax system without violating the tax law
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Similar questions
- Which is an incorrect statement regarding taxes? * a. Taxes are necessary for the continued existence of the government. b. The obligation to pay tax does not rest upon the privilege enjoyed by or the protection afforded to the citizen of the government but upon the necessity of money for the support of the state. c. There should be personal benefit enjoyed from the government before one is required to pay tax. d. Taxes should be collected without unnecessary delay but its collection should not be tainted with arbitrariness. e. Answer not givenarrow_forwardWhich one of the following statements is NOT correct about taxation? (A) Taxes produce revenue for government operations. (B) Itemized deductions provide a larger deduction amount than the standard deduction. (C) Taxation is used to influence the behavior of individuals, businesses, nonprofit entities, and even the government. (D) Tax rates and deductions are impacted by a taxpayer’s filing status.arrow_forwardWhich of the following is not a true statement regarding revenues from various types of nonexchange transactions? Derived tax revenues occur as a result of sales and or income tax. Imposed nonexchange revenues consist of only fines and penalties assessed by the governing agency. Government mandated nonexchange transactions includes grants from the federal government to the local public-school system for a free lunch program. Voluntary nonexchange transactions can originate from a governmental agency or private citizen organization. Imposed nonexchange transactions revenue recognition is made in the time period when the resulting resources are required to be used or in the first period in which use is permitted.arrow_forward
- A local politician claimed, “to reduce the government’sdeficit, it’s time we require companies to start payingtheir deferred income tax liabilities.” Explain to thepolitician what deferred income taxes represent and whythey should not be viewed as accounts payable to thegovernment.arrow_forwardWhich of the following statements is (are) correct? (x) Part of the administrative burden of a tax is the cost of implementing and administering government programs that use the tax revenue that is collected (y) A tax loophole occurs when tax laws give preferential treatment to specific types of behavior. (z) A mortgage interest deduction would be considered a tax loophole because it allows home purchasers to reduce their tax liability when they pay mortgage interest. A. (x), (y) and (z) B. (x) and (y) only C. (x) and (z) only D. (y) and (z) only E. (y) onlyarrow_forwardWhich of the following are not deductible by a CPA who prepares tax returns? a. Subscription to the Kiplinger Tax letter b. Subscription to CCH service online c.Dues to the country club to entertain clients d. Dues to the California Society of CPAsarrow_forward
- Is it ethical for state and city governments to entice specific businesses to relocate their operations to that state or city by offering them special tax breaks that are not extended to other businesses operating in that area?arrow_forwardWhich statement below best describes the entities that can accept donations from the public and provide donors with documentation to allow them to claim a tax deduction in respect of their donation? a. A local state school. b. A private hospital. c. Only entities classified as a deductible gift recipient (DGR) as they meet the necessary requirements to be registered by the ATO. d. Any not for profit organisation.arrow_forwardA local citizen gives a not-for-profit entity a cash donation that is restricted for research activities. The money should be recorded in Unrestricted Net Assets. Temporarily Restricted Net Assets. Permanently Restricted Net Assets. Deferred Revenue.arrow_forward
- Which of the following is not a goal of the tax law? a.Economic goals such as reduction in unemployment. b.Raise adequate revenue to operate the government. c.Social goals such as lowering the cost of adoption. d.Ensuring that all persons pay the same amount of tax.arrow_forwardWhich is NOT a proper exercise of administrative feasibility?a. Electronic Tax Payment System (eTPS)/Land Bank Remittance System (LBRS)b. Payment of tax thru credit/debit/prepaid cards/G-Cashc. Requirement to all taxpayers to file tax returnsd. Substituted Filing of Qualified Compensation Income Earnersarrow_forwardWhich of the following charitable contributions is not tax deductible? a.Clothing donated to a qualified veterans' organization. b.Cash donated to a qualified church. c.Time donated to a qualified veterans' organization. d.Donation of a car to a qualified nonprofit organization. e.All of these choices are tax deductible.arrow_forward
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