Question 1

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes.
-Scholarship funds used to pay room and board

Accepted Answer

A)  Taxable income(T) 
B)  Nontaxable income(N)

Question 2

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes.
-Foreign income of a controlled foreign corporation that has never paid a dividend.

Accepted Answer

A)  Taxable income(T) 
B)  Nontaxable income(N)

Question 3

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes.
-Stock dividend

Accepted Answer

A)  Taxable income(T) 
B)  Nontaxable income(N)

Question 4

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes.
-Loan forgiven by father

Accepted Answer

A)  Taxable income(T) 
B)  Nontaxable income(N)

Question 5

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes.
-Income earned in year 2 on a long-term contract using the completed contract method,

Accepted Answer

A)  Taxable income(T) 
B)  Nontaxable income(N)

Question 6

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes.
-Settlement for loss of finger in industrial accident

Accepted Answer

A)  Taxable income(T) 
B)  Nontaxable income(N)

Question 7

Bryan, age 66, is retired. His wife, Rebecca, age 64, still works part-time. They have income from the following sources:
$$\begin{array} { l r } 
\text { Rebecca's salary } & \$ 10,000 \
\text { Bryan's pension (all contributions made by his employer) } & 15,000 \
\text { Bryan's social security benefits } & 5,000 \
\text { Interest income from State of Montana bonds } & 1,000 \
\text { Dividend income from Ford Motor Co. stock } & 500 \
\text { Lottery prize } & 50
\end{array}$$
What is their joint gross income?

Accepted Answer

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

Question 8

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes.
-Income from employer-financed annuity

Accepted Answer

A)  Taxable income(T) 
B)  Nontaxable income(N)

Question 9

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes.
-Cash dividend

Accepted Answer

A)  Taxable income(T) 
B)  Nontaxable income(N)

Question 10

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes.
-Punitive damages received

Accepted Answer

A)  Taxable income(T) 
B)  Nontaxable income(N)

Exam 3: Determining Gross Income

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes. -Scholarship funds used to pay room and board

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes. -Foreign income of a controlled foreign corporation that has never paid a dividend.

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes. -Stock dividend

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes. -Loan forgiven by father

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes. -Income earned in year 2 on a long-term contract using the completed contract method,

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes. -Settlement for loss of finger in industrial accident

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes. -Income from employer-financed annuity

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes. -Cash dividend

Put T for Taxable income or N for Nontaxable income beside each item below as it normally would be treated for tax purposes. -Punitive damages received