Question 1

Explain the normal tax treatment of life insurance proceeds.

Accepted Answer

Most beneficiaries of the proceeds of a

Question 2

The recipient's basis in a gift always carries over from the gift's donor.

Accepted Answer

A) True 
 B)False

Question 3

Up to 85 percent of a person's Social Security benefits may be included in gross income.

Accepted Answer

A) True 
 B)False

Question 4

Natasha graduated at the top of her high school class and received a $10,000 scholarship to attend the college of her choice. Natasha decided to attend State University and spent her $10,000 as follows:   How much of the $10,000 should Natasha report as gross income?

Accepted Answer

A)  $10,000 
B)  $3,400 
C)  $2,500 
D)  $1,500 
E)  zero 
A)  $10,000 
B)  $3,400 
C)  $2,500 
D)  $1,500 
E)  zero

Question 5

Constructive receipt requires an accrual basis taxpayer to recognize income when the taxpayer has an unrestricted right to a payment that is to be received.

Accepted Answer

A) True 
 B)False

Question 6

Tighe won a new automobile from his employer for being the top salesperson in the entire firm. The auto cost the employer only $34,000 because he purchased a fleet of cars from the dealer; it had a retail price of $37,000. In addition, Tighe's employer gave him $5,000 with which to pay the taxes on the prize. How much must Tighe include in his gross income?

Accepted Answer

A)  $42,000 
B)  $37,000 
C)  $35,000 
D)  $32,000 
A)  $42,000 
B)  $37,000 
C)  $35,000 
D)  $32,000

Question 7

All of the following result in nontaxable income except:

Accepted Answer

A)  Stock dividend 
B)  Interest on municipal bonds 
C)  Capital gain distribution reinvested in the mutual fund 
D)  Distribution identified as a return of capital 
A)  Stock dividend 
B)  Interest on municipal bonds 
C)  Capital gain distribution reinvested in the mutual fund 
D)  Distribution identified as a return of capital

Question 8

In January, Zelda borrows $7,000 from her mother for moving expenses and clothes for starting her new job after graduating from college. She told her mother she would pay her 9 percent interest on the money but made no payments in the current year. If the applicable federal interest rate is 5 percent, how much interest income must Zelda's mother recognize?

Accepted Answer

A)  0 
B)  $233 
C)  $350 
D)  $420 
A)  0 
B)  $233 
C)  $350 
D)  $420

Question 9

Explain the tax treatment of a gift loan.

Accepted Answer

A gift loan between related parties requ

Question 10

What are acceptable fiscal years for tax purposes?

Accepted Answer

Acceptable fiscal years include any 12-m

Question 11

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes.
-Alimony received due to a divorce agreement executed prior to January 1, 2019

Accepted Answer

The answer of Put T for Taxable income or N...

Question 12

Bryan, age 66, is retired. His wife, Rebecca, age 64, still works part-time. They have income from the following sources:   What is their joint gross income?

Accepted Answer

A)  $10,500 
B)  $11,050 
C)  $25,500 
D)  $25,550 
E)  $30,550 
A)  $10,500 
B)  $11,050 
C)  $25,500 
D)  $25,550 
E)  $30,550

Explain the normal tax treatment of life insurance proceeds.

The recipient's basis in a gift always carries over from the gift's donor.

Up to 85 percent of a person's Social Security benefits may be included in gross income.

Natasha graduated at the top of her high school class and received a $10,000 scholarship to attend the college of her choice. Natasha decided to attend State University and spent her $10,000 as follows: How much of the $10,000 should Natasha report as gross income?

Constructive receipt requires an accrual basis taxpayer to recognize income when the taxpayer has an unrestricted right to a payment that is to be received.

All of the following result in nontaxable income except:

Explain the tax treatment of a gift loan.

What are acceptable fiscal years for tax purposes?

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes. -Alimony received due to a divorce agreement executed prior to January 1, 2019

Bryan, age 66, is retired. His wife, Rebecca, age 64, still works part-time. They have income from the following sources: What is their joint gross income?

Introduction to Taxation

The Tax Practice Environment

Employee Compensation

Deductions for Individuals and Tax Determination

Business Expenses

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Tax-Deferred Exchanges

Taxation of Corporations

Sole Proprietorships and Flow-Through Entities

Estates, Gifts, and Trusts

Filters

Exam 3: Determining Gross Income

Explain the normal tax treatment of life insurance proceeds.

The recipient's basis in a gift always carries over from the gift's donor.

Up to 85 percent of a person's Social Security benefits may be included in gross income.

Natasha graduated at the top of her high school class and received a $10,000 scholarship to attend the college of her choice. Natasha decided to attend State University and spent her $10,000 as follows: How much of the $10,000 should Natasha report as gross income?

Constructive receipt requires an accrual basis taxpayer to recognize income when the taxpayer has an unrestricted right to a payment that is to be received.

All of the following result in nontaxable income except:

Explain the tax treatment of a gift loan.

What are acceptable fiscal years for tax purposes?

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes. -Alimony received due to a divorce agreement executed prior to January 1, 2019

Bryan, age 66, is retired. His wife, Rebecca, age 64, still works part-time. They have income from the following sources: What is their joint gross income?

Introduction to Taxation

The Tax Practice Environment

Employee Compensation

Deductions for Individuals and Tax Determination

Business Expenses

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Tax-Deferred Exchanges

Taxation of Corporations

Sole Proprietorships and Flow-Through Entities

Estates, Gifts, and Trusts

Filters