Tax Accounting

(TCO A) A taxpayer may litigate a tax dispute without first paying the tax in

the:

0 U.S. District Court .

.; @ U.S. Tax Court.

0 U.S. Court of Federal Claims.

0 All of the above

(TCO F) A business bad debt is deductible for tax purposes as a(n):

.; @ ordinary business deduction.

0 short-term capital loss.

0 long-term capital loss.

0 miscellaneous itemized deduction.

(TCO I) Under the cash method of tax accounting, tax deductions are

generally taken when:

0 the liability arises .

.; @ payment is made.

0 the expense is actually incurred.

0 None of the above

(TCO A) Which of the following does not constitute tax evasion?

0 Arranging your affairs to keep your tax liability as low as possible under

the tax law

0 Trying to legitimately maximize profits

0 Trying to legitimately minimize your tax liability

.; @ All of the above

(TCO C) Which of the following items is not subject to federal income tax?

0 Interest on U.S. Treasury bonds

0 Gambling winnings

0 Interest on loans made