Explain the 3 Classification of individuals based on type of earnings: a. Pure compensation income earner b. Pure business or professional income c. Mixed income earner II. Multiple Choice. 1. Rewards received by Hidilyn Diaz from government is a. Subject to income tax b. Subject to donor’s tax c. Exempted from income tax 2. Rewards received by Hidilyn Diaz from private individuals/ organizations is a. Subject to income tax b. Subject to donor’s tax c. Exempted from income tax

Explain the 3 Classification of individuals based on type of earnings: a. Pure compensation income earner b. Pure business or professional income c. Mixed income earner II. Multiple Choice. 1. Rewards received by Hidilyn Diaz from government is a. Subject to income tax b. Subject to donor’s tax c. Exempted from income tax 2. Rewards received by Hidilyn Diaz from private individuals/ organizations is a. Subject to income tax b. Subject to donor’s tax c. Exempted from income tax

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter1: Understanding And Working With The Federal Tax Law

Section: Chapter Questions

Problem 41P

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Which of the following is not considered a purpose of taxation? A. To regulate B. To make the poor poorer C. To minimize the adverse effects of certain activities D. To have an equitable distribution of wealth among inhabitants True or False: You are employed. The Income tax on your salary is required to be paid at the Mayor’s Office.
Reproduce the tax formula include for individual taxpayers in good form and briefly describe each for the components of the formula. Discuss the differences between the tax formula for individuals and that for corporations.
The evaluation of a tax system’s fairness requires a particular concept of fairness, or equity, and a means of measuring how a tax system redistributes income to make the distribution more-------------------------------. * Alternative to the standard deduction, whereby a taxpayer deducts the total amount of money spent on various expenses, such as gifts to charity and interest on home mortgages is called-------------------------- deductions * Tax -------------- are amounts by which taxpayers are allowed to reduce the taxes they owe to the government through spending, for example on childcare * Tax deductions are amounts by which taxpayers are allowed to reduce their taxable income through spending on items such as charitable------------------- or home mortgage interest
Comment on the following items relative to tax planning strategies of a fiduciary entity. A. To reduce taxes for a typical family, should income be shifted to a trust or from a trust? Why? B. To reduce overall taxes, should a high-income, wealthy beneficiary be assigned to the first or second tier of trust distributions? Why?
Whilst searching for related literatures for her thesis study, Jackie found a tax law which provides that proceeds from the collection of taxes are to be used to rehabilitate a private organization under financial stress. This clearly violates what constitutional right? a. right to just compensation b. right to due process c. right against self-incrimination d. right to equal protection of the law
Reproduce the tax formula for indivudal taxpayers in good form and briefly describe each of the components of the formula. **You do not have to discuss the differences between the formula for individuals and corporations.**
1. The following defines taxation, except: * a. It is an inherent power of the state. b. It is an executive prerogative. c. It is a process of collecting contributions. d.It is a mode of allocating government costs or burden to the people. 2. It is an economic principle that states that the amount of tax an individual pays should be dependent on the level of burden the tax will create relative to the wealth of the individual. * a. Cost allocation b. Ability to pay c. Benefit received d. Lifeblood doctrine
Describe each of the various tax credits: Child Tax Credit, Earned Income Credit (EIC), Child and Dependent Care Credit, Premium Tax Credit, American Opportunity Credit, Lifetime Learning Credit, Foreign Tax Credit, and the Adoption Credit. For each of the tax credits listed above, are there limitations, such as those on filing status, ages of children, and income levels? Can they be used for the taxpayer, spouse, and/or dependents? Are there specific criteria used to determine if a taxpayer qualifies for the credit?
Evaluate the three strategies reducing income, increasing deductions and taking advantage of tax credits that you listed based on their overall effect on a person's tax situation (the amount of income taxes that the person will have to pay).
1.) Which of the following is tax exempt for a domestic corporation? a. business income derived from abroad b. dividend from a domestic corporation c. monetary benefit from deposit substitute 2.) Which of the following types of income is/are not returnable a. Professional Income b. Business Income c. Compensation Income d. Capital Gains