Test Bank for South-

Test Bank for South- Western Federal Taxation 2023 Corporations, Partnerships, Estates and Trusts, 46e James Young, Annette Nellen, William Raabe, Mark Persellin, Sharon Lassar, Andrew Cuccia, Brad Cripe (All Chapters Download link at the end of this file) 1 / 2

Name:

Class:

Date:

CH 01 Understanding and Working with the Federal Tax Law

True / False

• Many states have balanced budgets because laws or constitutional amendments preclude deficit spending.
• True
• False

ANSWER: True

• The U.S. Federal government has a provision in the Constitution that precludes deficit spending.
• True
• False

ANSWER: False

• Revenue-neutral tax laws reduce deficits.
• True
• False

ANSWER: False

• Longer class lives for depreciable property and the required use of the straight-line method of depreciation would likely

dampen the tax incentive for purchasing capital assets.

• True
• False

ANSWER: True

• The Internal Revenue Code is a compilation of Federal tax legislation that appears in Title 26 of the United States

Code.

• True
• False

ANSWER: True

• The favorable treatment of research and development expenses is one means of controlling the economy.
• True
• False

ANSWER: False

• The encouragement of private-sector pension plans can be justified under the encouragement of certain industries.
• True
• False

ANSWER: False

• One Internal Revenue Code section enables shareholders in a small business corporation to obtain an ordinary

deduction for any loss recognized on a stock investment.

• True
• False

ANSWER: True

• One of the justifications for the enactment of the tax law governing corporate reorganizations was the economic benefit
• / 2