CFP

AAA

Income Tax Law Fundamentals - Answer Key

1. C

Effective tax planning is known as tax avoidance. Investing in public muni-bonds provides interest exempt from both federal and AMT tax. Since she bought "local" muni-bonds, she is supporting a debt obligation of a local municipality. Home ownership is a good way to build long-term equity.

2.
B

Traditional IRAs, annuities and 401(k) plans are all examples of tax-deferred investment vehicles. Income earned in individual, joint and revocable trust accounts is all taxed in the year earned.

3.
A

Tax evasion is illegal and tax avoidance techniques are legal. The IRC is the highest source of tax authority. Tax-free income is exempt from federal income tax, but sometimes taxed at the state and local levels.

4.
D

Regulations are issued by the U.S. Treasury Department. All the other choices are responsibilities of the National Office of the IRS.

5.
D

All of the above statements are true concerning the federal tax trial and appeal courts. Introduction
comments powered by Disqus
Related Articles
  1. Six Things Bad Financial Advisors Do
    Investing Basics

    Six Things Bad Financial Advisors Do

  2. Fee-Only Financial Advisers: What You ...
    Investing Basics

    Fee-Only Financial Advisers: What You ...

  3. It Is Not Too Late To Hedge Against ...
    Stock Analysis

    It Is Not Too Late To Hedge Against ...

  4. Another Sound Lesson In Risk Management
    Investing News

    Another Sound Lesson In Risk Management

  5. 10 Characteristics of Successful Entrepreneurs
    Entrepreneurship

    10 Characteristics of Successful Entrepreneurs

Trading Center