Exam 19: Gross Income: Inclusions

Mr.and Mrs.Tsayong are both over 66 years of age and are filing a joint return.Their income this year consisted of the following: Taxable interest income \ 10,000 Taxable pension 16,000 Total Social Security benefits 20,000 Tax-exempt interest 5,000 They did not have any adjustments to income.What amount of Mr.and Mrs.Tsayong's Social Security benefits is taxable this year?

Julia,age 57,purchases an annuity for $33,600.Julia will receive $400 per month for the rest of her life.The expected return multiple is 20.0.At age 88,the amount that Julia may exclude from income is

Interest on Series E and Series EE U.S.savings bonds need not be reported until the bonds mature.

Derek,a single taxpayer,has AGI of $55,200 which includes $5,000 of qualified dividends.Derek does not itemize deductions.What is his 2019 federal income tax?

A check received after banking hours is considered constructively received by the payee even though the check cannot be converted to cash.

In common law states,all income is split evenly between the two spouses.

Under the tax concept of income,all realized income is recognized and subject to tax.

Parents often wish to shift income to young children in order to lower the family tax burden.Tax policies and provisions that limit that practice include all of the following except

Natasha,age 58,purchases an annuity for $40,000.Natasha will receive $400 per month for the rest of her life.The expected return multiple is 20.0.At age 65,the amount that Natasha may exclude from income is

Amy's employer provides her with several fringe benefits.Which of the following are included in her taxable income?

Betty is a single retiree who receives Social Security benefits of $12,000,tax-exempt interest of $4,000 and a taxable pension.Determine the amount of taxable Social Security benefits assuming her annual pension is a.$10,000. b.$20,000. c.$50,000.

In 2019,Richard,a single taxpayer,has adjusted gross income of $40,200.His AGI includes $4,000 of qualified dividends.Richard does not itemize deductions.What is his 2019 federal income tax?

Speak Corporation,a calendar-year,cash-basis taxpayer,sells packages of foreign language lessons to individuals planning to work overseas.In December 2019,it sold and received payment for $600,000 of 24-month lesson packages to be provided evenly through 2020 and 2021.Speak Corporation will recognize the $600,000 of income

Interest on the obligations of the U.S.government,states,territories,and U.S.possessions and their political subdivisions are tax-exempt.

Distributions from corporations to the shareholders in a nonliquidating distribution will usually be classified as a dividend up to the amount of the corporation's

Gross income is limited to amounts received in the form of cash.

Under the terms of their divorce agreement executed in August of this year,Clint transferred Beta,Inc.stock to his former wife,Rosa,as a property settlement.At the time of the transfer,the stock had a basis to Clint of $55,000 and a fair market value of $68,000.Rosa subsequently sold the stock for $75,000.What is the tax consequence of first the stock transfer and then the stock sale to Rosa?

During 2018,Christiana's employer withheld $1,500 from her wages for state income taxes.She claimed the $1,500 as an itemized deduction on her 2018 federal income tax return which included $14,000 of itemized deductions (the 2018 standard deduction was $12,000).Christiana is single.On her 2018 state income tax return,her state income tax was $900.As a result,Christiana received a $600 refund in 2019.What amount must Christiana include in income in 2019?

Under both the accounting and tax law concepts of income,income must be "realized."

Jeannie,a single taxpayer,retired during the year,to take over the management of some rental property.She had the following items of income and expense: Salary prior to retirement date $34,000 Dividends from domestic corporation 4,000 Interest from City of Los Angeles bonds 5,000 Annuity (60% exclusion ratio)12,000 Share of partnership income 14,000 Partnership distribution 10,000 Rent income 17,000 Rent expenses 9,000 What is Jeannie's adjusted gross income for the year?