Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
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Question
Chapter 1, Problem 1MCQ
To determine
Introduction:Income tax law enables individuals to pay taxes to the government for the social and economic benefits of the public and it allows the government to collect and spend revenues in creating value for the society at large. Income tax law applies not only to individuals but also to corporations, firms, trusts, etc.
To choose:The recent tax changes that are not scheduled to expire after 2025.
Expert Solution & Answer
Answer to Problem 1MCQ
Option ‘d. Reduction of corporate tax rates to 21 percent’ is correct.
Explanation of Solution
Explanation for correct answer: After the introduction of ‘The Tax Cuts and Jobs Act’ or TCJA act in December 2017.The TCJA did overhauls to the provisions and scheduled some provisions to expire by 2025, such as suspension of exemptions given to individuals, lowering the individual tax rates, restriction on personal casualty losses, etc.but excluding the provision regardingthe reduction of corporate tax rates. Thus, theoption ‘d. Reduction of corporate tax rates to 21 percent’ is correct.
Explanation for incorrect answers: The Tax Cuts and Jobs Act or TCJA act brings changes to the law and scheduled some provisions to expire by 2025. List of major expiring provisions are listed below:
- Reduction of individual tax rates
- Increased standard deduction
- Suspension of personal exemptions
- Qualified business income deduction
- Suspension of itemized deduction phase-out
- Temporary cap on state and local taxes
- Suspension of miscellaneous itemized deductions subjectto 2 percent floor
- Suspension of moving expense deduction
- Reduced limits on mortgage interest deduction
- Restrictions on personal casualty losses
- Increased AMT exemption and phase-out
- Changes to the kiddie tax
- Increased child tax credit
- 100 percent bonus
depreciation
Thus, the options ‘a. Suspension of personal exemptions’, ‘b. General lowering of individual tax rates’ and ‘c. Restrictions on the deduction of casualty and theft losses’ are set to expire by 2025.
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Which of the following recent tax changes is not scheduled to expire after 2025?a. Suspension of personal exemptionsb. General lowering of individual tax ratesc. Restrictions on the deduction of casualty and theft lossesd. Reduction of corporate tax rates to 21 percent
2
Using the 2019 corporate tax rate: a. What are the tax liability, the marginal tax rate, and the average tax
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Chapter 1 Solutions
Income Tax Fundamentals 2020
Ch. 1 - Prob. 1MCQCh. 1 - Which of the following tax forms are used by...Ch. 1 - Prob. 3MCQCh. 1 - Prob. 4MCQCh. 1 - Which of the following is a deduction for adjusted...Ch. 1 - Prob. 6MCQCh. 1 - Prob. 7MCQCh. 1 - Prob. 8MCQCh. 1 - Joan, who was divorced in 2019, had filed a joint...Ch. 1 - Prob. 10MCQ
Ch. 1 - Prob. 11MCQCh. 1 - Margaret, age 65, and John, age 62, are married...Ch. 1 - Prob. 13MCQCh. 1 - Robin and Howie file married filing jointly and...Ch. 1 - Prob. 15MCQCh. 1 - Prob. 16MCQCh. 1 - Taxpayers who are blind get the benefit of: An...Ch. 1 - Which of the following is not a capital asset to...Ch. 1 - Jayne purchased General Motors stock 6 years ago...Ch. 1 - Prob. 20MCQCh. 1 - Shannon, a single taxpayer, has a long-term...Ch. 1 - Prob. 22MCQCh. 1 - Access the Internet and go to www.irs.gov and...Ch. 1 - Prob. 24MCQCh. 1 - List three major purposes the tax system is meant...Ch. 1 - Jason and Mary are married taxpayers in 2019. They...Ch. 1 - Leslie is a single taxpayer who is under age 65...Ch. 1 - In 2019, Lou has a salary of $53,300 from her job....Ch. 1 - Diego, age 28, married Dolores, age 27, in 2019....Ch. 1 - Ulysses and Penelope are married and file separate...Ch. 1 - Prob. 7PCh. 1 - Prob. 8PCh. 1 - Prob. 9PCh. 1 - Prob. 10PCh. 1 - Christine is a single 50 -year-old taxpayer with...Ch. 1 - Prob. 12PCh. 1 - Prob. 13PCh. 1 - Determine from the tax table in Appendix A the...Ch. 1 - Prob. 15PCh. 1 - Melissa and Aaron are married taxpayers with...Ch. 1 - Jessica and Carl were married on July 1,2019. What...Ch. 1 - Prob. 18PCh. 1 - Prob. 19PCh. 1 - Prob. 20PCh. 1 - Prob. 21PCh. 1 - What is the total dollar amount of personal and...Ch. 1 - Prob. 23PCh. 1 - Prob. 24PCh. 1 - Prob. 25P
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