ACC 455 Final Exam 1) Which of following statements regarding proposed regulations is not correct?
A. Proposed and
... [Show More] temporary regulations are generally issued simultaneously.
B. Proposed regulations do not provide any insight into IRS's interpretation of tax law.
C. Proposed regulations expire after 3 years.
D. Practitioners and other interested parties may comment on proposed regulations.
2) Regulations are
A. presumed to be valid and to have almost same weight as IRC
B. equal in authority to legislation if interpretative
C. equal in authority to legislation
D. equal in authority to legislation if statutory
3) Which of following courts is not a trial court for tax cases?
A. U.S. Tax Court
B. U.S. Court of Federal Claims
C. U.S. Bankruptcy Court
D. U.S. District Court
4) Which of following statements is incorrect?
A. Limited partners' liability for partnership debt is limited to their amount of investment.
B. In a general partnership, all partners have unlimited liability for partnership debts.
C. In a limited partnership, all partners participate in managerial decision-making.
D. All of statements are correct.
5) Which of following is an advantage of a sole proprietorship over other business forms?
A. Low tax rates on dividends
B. Ease of formation
C. Tax-exempt treatment of fringe benefits
D. deduction for compensation paid to owner
6) Which of following statements is correct?
A. S shareholders are taxed on their proportionate share of earnings that are distributed.
B. S shareholders are taxed on their proportionate share of earnings whether or not distributed.
C. An owner of a C corporation is taxed on his or her proportionate share of earnings.
D. S shareholders are only taxed on distributions.
7) Three members form an LLC in current year. Which of following statements is incorrect?
A. LLC can elect to be taxed as a C corporation with no special tax consequences.
B. If LLC elects to use its default classification, it can elect to change its status to being taxed as a C corporation beginning with third tax year after initial classification.
C. LLC's default classification under check-the-box rules is as a partnership.
D. LLC can elect to have its default classification ignored.
8) Identify which of following statements is true. [Show Less]