MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The unified transfer tax system 1) A) imposes a single tax upon transfers of property during an individual's life and at death. B) imposes a single tax upon transfers of property only at an individual's death. C) imposes a single tax upon transfers of property during an individual's lifetime only. D) none of above. 2) 2) Firefly Corporation is a C corporation. Freya owns all of the stock. During the current year Firefly earned taxable income of $500,000 and paid a $300,000 dividend to Freya. Which of the following statements is correct? A) Firefly's income will flow through to Freya's tax return, and she will pay the taxes on the $500,000 of corporate income. B) Firefly will pay corporate income tax on its earnings, and Freya will pay individual income tax on the dividends. C) Firefly will not pay any taxes, but Freya will pay taxes on the dividend received. D) Only Firefly will pay taxes. Freya will not pay any taxes due to her holdings in Firefly. 3) 3) Alan files his 2020 tax return on April 1, 2021, shortly before the April 15 due date. His return contains no misstatements or omissions of income. The statute of limitations for changes to the return expires A) April 15, 2024. B) April 15, 2025. C) April 1, 2025. D) The statute of limitations never expires. 4) 4) Horizontal equity means that A) taxpayers with larger amounts of income should pay more tax than taxpayers with lower amounts of income. B) taxpayers with the same amount of income should pay the same amount of tax. C) all taxpayers should pay the same tax. D) None of the above. 5) 5) The computer is the primary tool of the tax professional. The tax professional uses the computer for all of the following client services except A) tax return preparation. B) investment purchases on behalf of clients. C) tax research for client questions. D) tax planning for clients. 6) 6) The largest source of revenues for the federal government comes from A) estate and gift taxes. B) corporate income taxes. C) individual income taxes. D) Social Security and Medicare taxes (FICA). 1