AFIP AFIP Taxation and Estate Planning in F&I

Question 1

In the context of vehicle sales, which tax is typically calculated as a percentage of the vehicle's purchase price and collected at the time of sale?

Accepted Answer

Sales tax

Answer

Federal excise tax

Answer

Use tax

Answer

Property tax

Question 2

A customer purchases a vehicle in a state without sales tax but registers it in a state that has one. Which tax may apply?

Accepted Answer

Use tax

Answer

Transfer tax

Answer

Luxury tax

Answer

Excise tax

Question 3

For federal income tax purposes, interest paid on an auto loan is generally:

Accepted Answer

Deductible only if the vehicle is used for business purposes

Answer

Fully deductible for all taxpayers

Answer

Deductible as investment interest

Answer

Never deductible under any circumstances

Question 4

What is a 'step-up in basis' relevant to estate planning for vehicle or financial asset transfer at death?

Accepted Answer

The adjustment of an inherited asset's tax basis to its fair market value at the date of death

Answer

The increase in an asset's value during the owner's lifetime

Answer

A penalty tax applied to large estates

Answer

The process of transferring title without probate

Question 5

Under IRS rules, what is the standard mileage rate used for?

Accepted Answer

Determining the deductible cost of using a personal vehicle for business, medical, or charitable purposes

Answer

Calculating depreciation on fleet vehicles for manufacturer rebates

Answer

Setting the maximum allowable lease payment for tax deduction

Answer

Computing sales tax on high-mileage used vehicles

Question 6

Which estate planning tool allows an individual to transfer assets directly to beneficiaries while avoiding probate?

Accepted Answer

Revocable living trust

Answer

Last will and testament

Answer

Power of attorney

Answer

Advance healthcare directive