Question 1

Which of the following is nontaxable income to the recipient for tax purposes?

Accepted Answer

A) Salary income 
B) Income from real estate rental property 
C) Income from tips 
D) Inheritances 
E) None of the above 
A) Salary income 
B) Income from real estate rental property 
C) Income from tips 
D) Inheritances 
E) None of the above

Question 2

Marie had a good year.She received the following prizes and awards: - an iPad from The Oprah Show with a fair market value of $500
- lottery winnings of $1,000 received in cash
- a plaque worth $25 plus $100 of Godiva chocolate in recognition for 100 days on the job without an accident
- a $10,000 cash prize from American Idol
How much of her prizes and awards should Marie report on her tax return?

Accepted Answer

A) None,they are all excluded from income 
B) $11,000;only cash prizes and awards are included 
C) $11,500;the award from her job is excluded 
D) $11,700;the plaque may be excluded 
E) $11,725;everything is included at the highest amount 
A) None,they are all excluded from income 
B) $11,000;only cash prizes and awards are included 
C) $11,500;the award from her job is excluded 
D) $11,700;the plaque may be excluded 
E) $11,725;everything is included at the highest amount

Question 3

Arthur,age 19,is a full-time student at Gordon College and is a candidate for a bachelor's degree.During 2013,he received the following amounts: $\begin{array}{ll}
\text { Tuition scholarship } & \$ 2,400 \
\text { Loan from college financial aid office } & \$ 1,000 \
\text { Cash support from parents } & \$ 2,000 \
\text { Ordinary cash dividend } & \$ 500 \
\text { Cash prize awarded in contest } & \$ 300
\end{array}$ What is his adjusted gross income for 2013?

Accepted Answer

A) $700 
B) $800 
C) $3,200 
D) $6,200 
E) None of the above 
A) $700 
B) $800 
C) $3,200 
D) $6,200 
E) None of the above

Question 4

For 2013,the maximum percentage of Social Security benefits which must be included in a taxpayer's gross income is?

Accepted Answer

A) 0% 
B) 50% 
C) 65% 
D) 85% 
E) 100% 
A) 0% 
B) 50% 
C) 65% 
D) 85% 
E) 100%

Question 5

If an annuitant,whose annuity starting date was January 1,2001,dies before recovering his or her investment in the annuity,any unrecovered investment is recognized as a loss on the annuitant's tax return for the year of death.

Accepted Answer

A) True 
 B)False

Question 6

An auto that is received as a prize should be included in the taxpayer's income at its list price rather than its fair market value.

Accepted Answer

A) True 
 B)False

Question 7

Kim earned $30,000 from Pfizer before she was laid off.She then collected $7,000 of unemployment benefits.Finally,Kim received a $12,500 scholarship for tuition so she could return to college to earn a microbiology degree.How much does Kim need to report as income on her tax return?

Accepted Answer

Kim needs to report $37,000 on

Question 8

Which of the following is generally excluded from gross income?

Accepted Answer

A) Dividends 
B) Rewards 
C) Disability benefits 
D) Passive income 
E) None of the above 
A) Dividends 
B) Rewards 
C) Disability benefits 
D) Passive income 
E) None of the above

Question 9

Noncash items received as income must be included in income at their fair market value.

Accepted Answer

A) True 
 B)False

Question 10

Under a divorce agreement executed in 2013,periodic payments of either cash or property must be made at regular intervals to be deductible as alimony.

Accepted Answer

A) True 
 B)False

Question 11

Amounts received by an employee as reimbursement for medical expenses under a policy provided by the taxpayer's employer are excluded from gross income.

Accepted Answer

A) True 
 B)False

Question 12

A taxpayer in the 33 percent tax bracket invests in a New York City Bond paying 5 percent interest.What taxable interest rate would provide the same after-tax return?

Accepted Answer

7.46% = 5%

Question 13

In 2013,what rate would a taxpayer pay on qualified dividend income:
a.If in the 33 percent bracket?
b.If in the 10 percent bracket?

Accepted Answer

a.15 perce

Question 14

The receipt of an inheritance is excluded from the taxable income of the recipients.

Accepted Answer

A) True 
 B)False

Question 15

Susie received unemployment benefits in the current year.

Accepted Answer

A) All of the unemployment benefits are taxable. 
B) All of the unemployment benefits are non-taxable. 
C) Half of the unemployment benefits are taxable and half are non-taxable. 
D) The taxability of the unemployment benefits depends upon other income received for the year. 
A) All of the unemployment benefits are taxable. 
B) All of the unemployment benefits are non-taxable. 
C) Half of the unemployment benefits are taxable and half are non-taxable. 
D) The taxability of the unemployment benefits depends upon other income received for the year.

Question 16

All of the following amounts are taxable income to the recipient except:

Accepted Answer

A) Prizes 
B) Unemployment compensation 
C) Salaries 
D) Farm income 
E) Gifts 
A) Prizes 
B) Unemployment compensation 
C) Salaries 
D) Farm income 
E) Gifts

Question 17

Steve and Laura were divorced in 2007.Laura pays Steve alimony of $1,200 a month.The payment amount was agreed upon in the decree of divorce.To save money,Steve and Laura still live together.Are the alimony payments that Steve receives in 2013 includable in his income? Can Laura take a deduction for alimony paid?

Accepted Answer

A) Yes,the payments meet all alimony payment requirements. 
B) Yes,alimony is always taxable. 
C) No,only some of it is tax-exempt because Laura pays Steve too much alimony. 
D) No,since Steve and Laura still live together,the payments are not considered alimony. 
E) Yes,alimony payments are not tax-exempt. 
A) Yes,the payments meet all alimony payment requirements. 
B) Yes,alimony is always taxable. 
C) No,only some of it is tax-exempt because Laura pays Steve too much alimony. 
D) No,since Steve and Laura still live together,the payments are not considered alimony. 
E) Yes,alimony payments are not tax-exempt.

Question 18

Under a divorce agreement executed in 2011,Bob is required to pay his ex-wife,Carol,$3,000 a month until their youngest daughter is 21 years of age.At that time,the required payments are reduced to
$2,000 per month.
a.How much of each $3,000 payment may be deducted as alimony by Bob?
b.How much of each $3,000 payment must be included in Carol's taxable income?

Accepted Answer

The answer of Under a divorce agreement executed in 2011,Bob...

Question 19

Bonnie receives salary income of $30,000,unemployment compensation of $5,400,and dividend income of $1,000 and a gift of $7,000 in cash from her aunt.How much total income does Bonnie have?

Accepted Answer

$36,400 =

Question 20

When calculating the exclusion ratio for an annuity,the ratio should be revised when there is a significant change in the taxpayer's status or health.

Accepted Answer

A) True 
 B)False

Which of the following is nontaxable income to the recipient for tax purposes?

For 2013,the maximum percentage of Social Security benefits which must be included in a taxpayer's gross income is?

If an annuitant,whose annuity starting date was January 1,2001,dies before recovering his or her investment in the annuity,any unrecovered investment is recognized as a loss on the annuitant's tax return for the year of death.

An auto that is received as a prize should be included in the taxpayer's income at its list price rather than its fair market value.

Kim earned $30,000 from Pfizer before she was laid off.She then collected $7,000 of unemployment benefits.Finally,Kim received a $12,500 scholarship for tuition so she could return to college to earn a microbiology degree.How much does Kim need to report as income on her tax return?

Which of the following is generally excluded from gross income?

Noncash items received as income must be included in income at their fair market value.

Under a divorce agreement executed in 2013,periodic payments of either cash or property must be made at regular intervals to be deductible as alimony.

Amounts received by an employee as reimbursement for medical expenses under a policy provided by the taxpayer's employer are excluded from gross income.

A taxpayer in the 33 percent tax bracket invests in a New York City Bond paying 5 percent interest.What taxable interest rate would provide the same after-tax return?

In 2013,what rate would a taxpayer pay on qualified dividend income: a.If in the 33 percent bracket? b.If in the 10 percent bracket?

The receipt of an inheritance is excluded from the taxable income of the recipients.

Susie received unemployment benefits in the current year.

All of the following amounts are taxable income to the recipient except:

Bonnie receives salary income of $30,000,unemployment compensation of $5,400,and dividend income of $1,000 and a gift of $7,000 in cash from her aunt.How much total income does Bonnie have?

When calculating the exclusion ratio for an annuity,the ratio should be revised when there is a significant change in the taxpayer's status or health.

The Individual Income Tax Return

Business Income and Expenses, Part I

Business Income and Expenses, Part II

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding, Estimated Payments, and Payroll Taxes

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters

Exam 2: Gross Income and Exclusions

Which of the following is nontaxable income to the recipient for tax purposes?

For 2013,the maximum percentage of Social Security benefits which must be included in a taxpayer's gross income is?

If an annuitant,whose annuity starting date was January 1,2001,dies before recovering his or her investment in the annuity,any unrecovered investment is recognized as a loss on the annuitant's tax return for the year of death.

An auto that is received as a prize should be included in the taxpayer's income at its list price rather than its fair market value.

Kim earned $30,000 from Pfizer before she was laid off.She then collected $7,000 of unemployment benefits.Finally,Kim received a $12,500 scholarship for tuition so she could return to college to earn a microbiology degree.How much does Kim need to report as income on her tax return?

Which of the following is generally excluded from gross income?

Noncash items received as income must be included in income at their fair market value.

Under a divorce agreement executed in 2013,periodic payments of either cash or property must be made at regular intervals to be deductible as alimony.

Amounts received by an employee as reimbursement for medical expenses under a policy provided by the taxpayer's employer are excluded from gross income.

A taxpayer in the 33 percent tax bracket invests in a New York City Bond paying 5 percent interest.What taxable interest rate would provide the same after-tax return?

In 2013,what rate would a taxpayer pay on qualified dividend income: a.If in the 33 percent bracket? b.If in the 10 percent bracket?

The receipt of an inheritance is excluded from the taxable income of the recipients.

Susie received unemployment benefits in the current year.

All of the following amounts are taxable income to the recipient except:

Bonnie receives salary income of $30,000,unemployment compensation of $5,400,and dividend income of $1,000 and a gift of $7,000 in cash from her aunt.How much total income does Bonnie have?

When calculating the exclusion ratio for an annuity,the ratio should be revised when there is a significant change in the taxpayer's status or health.

The Individual Income Tax Return

Business Income and Expenses, Part I

Business Income and Expenses, Part II

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding, Estimated Payments, and Payroll Taxes

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters