Exam 2: Gross Income and Exclusions

Indicate whether each of the items listed below would be (a) included in gross income or (b) excluded from gross income for the 2019 tax year. -Life insurance proceeds received upon the death of a family member

Indicate whether each of the items listed below would be (a) included in gross income or (b) excluded from gross income for the 2019 tax year. -Wages

In 2019, what rate would a single taxpayer pay on qualified dividend income: a.If in the 37 percent bracket? b.If in the 24 percent bracket?

Awards, bonuses, and gifts are all included in gross income.

Melissa took a $1,500 distribution from her educational savings account and used $1,200 to pay for qualified education expenses. Before the distribution, Melissa's account balance was $4,000, of which $1,000 was earnings. Calculate the following: a. The tax-free return of capital b. Her new adjusted basis for her savings account c. Distribution of earnings potentially subject to tax d. The excludable portion of the earnings e. The taxable portion of her earnings

A scholarship for room and board granted in 2019 is fully taxable to the recipient.

Indicate whether each of the items listed below would be (a) included in gross income or (b) excluded from gross income for the 2019 tax year. -Lottery winnings

Taxable amount this year. Subtract line 8 from line 1

All of the following must be included in gross income, except:

Lee and Pat are married taxpayers living in Louisiana. Lee earns wages of $40,000 and has $5,000 of dividend income from separate property. Lee and Pat have interest income from community property of $10,000. If Lee and Pat file separate income tax returns, what amount of income must be included on Lee's separate tax return?

Barry has a successful methamphetamine laboratory. Producing methamphetamine is illegal under federal law. Is Barry required by law to report the income from his lab on his tax return? Why?

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

In June of the current year, Rob's wealthy stepmother died and left him a stock portfolio worth $600,000. Before she died, she gave him a gift of $20,000 in cash. How much of these amounts, if any, are taxable to Rob? Why?

Which of the following must be included in the gross income of the recipient?

If an annuitant, whose annuity starting date was January 1, 2008, dies before recovering his or her investment in the annuity, any unrecovered investment is recognized as a miscellaneous itemized deduction on the annuitant's tax return for the year of death.

For married taxpayers filing a joint return in 2019, at what AGI level does the phase-out limit for contributions to Qualified Tuition Programs (Section 529 plans) start?

In regards to Social Security benefits:

Dividend income arising from stock received as a gift is excluded from gross income since the dividends are considered part of the gift.

Which of the following is classified as nontaxable income?

A gift received from a financial institution for opening a bank account is not taxable income to the recipient.