Question 1

Gross income includes:

Accepted Answer

A)  all income from whatever source derived unless excluded by law. 
B)  excluded income. 
C)  deferred income. 
D)  all realized income. 
E)  All of the choices are correct. 
A)  all income from whatever source derived unless excluded by law. 
B)  excluded income. 
C)  deferred income. 
D)  all realized income. 
E)  All of the choices are correct.

Question 2

Opal deducted $2,400 of state income taxes on her tax return last year. This year she received a state income tax refund of $170. What amount of the refund, if any, should Opal include in her gross income if last year her total itemized deductions exceeded the standard deduction by $350?

Accepted Answer

A)  $2,050 
B)  $350 
C)  $180 
D)  $170 
E)  None of the above - refunds of state income taxes are not included in gross income. 
A)  $2,050 
B)  $350 
C)  $180 
D)  $170 
E)  None of the above - refunds of state income taxes are not included in gross income.

Question 3

Robert will be working overseas on a permanent assignment for an international company beginning on March 1 of this year (306 days this year). His salary is $11,000 per month while Robert is overseas, but only $9,200 per month otherwise. What is the minimum amount of Robert's salary that he must include in gross income this year? (Round your final answer to the nearest whole dollar amount & assume that there are 365 days in this year.)

Accepted Answer

$41,295
The maximum foreign earned incom

Question 4

Helen is a U.S. citizen and CPA, who moved to London, England three years ago to work for a British company. This year, she spent the entire year in London and earned a salary of $110,000. How much of her salary will she be allowed to exclude from gross income in the U.S.?

Accepted Answer

A)  $82,000. 
B)  $103,900. 
C)  $105,500. 
D)  $108,000. 
E)  All of her salary is included in gross income. 
A)  $82,000. 
B)  $103,900. 
C)  $105,500. 
D)  $108,000. 
E)  All of her salary is included in gross income.

Question 5

Andres has received the following benefits this year.
   
Besides these benefits Andres missed work for two months due to an illness. During his illness Andres received $6,500 in sick pay from a disability insurance policy. Assume Andres has disability insurance provided by his employer as a nontaxable fringe benefit. What amount, if any, must Andres include in gross income this year?

Accepted Answer

$115,920 = $92,000 + $15,000 +

Question 6

Wherewithal-to-pay represents the principle that a realized transaction should require a taxpayer to sell other assets in order to pay income taxes.

Accepted Answer

A) True 
 B)False

Question 7

Frank received the following benefits from his employer this year. What amount must Frank include in his gross income?

Accepted Answer

A)  $54,450 
B)  $57,350 
C)  $56,250 
D)  $59,150 
E)  Zero - these benefits are excluded in gross income. 
A)  $54,450 
B)  $57,350 
C)  $56,250 
D)  $59,150 
E)  Zero - these benefits are excluded in gross income.

Question 8

Excluded income will never be subject to the federal income tax.

Accepted Answer

A) True 
 B)False

Question 9

Wendell is an executive with CFO Tires. At the beginning of this year the corporation loaned Wendell $50,000 at an interest rate of one percent. Wendell would have paid interest of $2,500 this year if the interest rate on the loan had been set at the prevailing Federal interest rate. Wendell used the funds as a down payment on a vacation home and during the year he paid $500 of interest to CFO. On December 31, CFO forgave the loan and remaining interest. What amount of gross income does Wendell recognize from the loan this year?

Accepted Answer

$52,000
Wendell must include $2,000 in g

Question 10

A taxpayer generally includes in gross income the amount of debt forgiven by a lender.

Accepted Answer

A) True 
 B)False

Gross income includes:

Opal deducted $2,400 of state income taxes on her tax return last year. This year she received a state income tax refund of $170. What amount of the refund, if any, should Opal include in her gross income if last year her total itemized deductions exceeded the standard deduction by $350?

Helen is a U.S. citizen and CPA, who moved to London, England three years ago to work for a British company. This year, she spent the entire year in London and earned a salary of $110,000. How much of her salary will she be allowed to exclude from gross income in the U.S.?

Wherewithal-to-pay represents the principle that a realized transaction should require a taxpayer to sell other assets in order to pay income taxes.

Frank received the following benefits from his employer this year. What amount must Frank include in his gross income?

Excluded income will never be subject to the federal income tax.

A taxpayer generally includes in gross income the amount of debt forgiven by a lender.

An Introduction to Tax

Tax Compliance, the IRS, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Dependents, and Filing Status

Individual Deductions

Investments

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Filters

Exam 5: Gross Income and Exclusions

Gross income includes:

Opal deducted $2,400 of state income taxes on her tax return last year. This year she received a state income tax refund of $170. What amount of the refund, if any, should Opal include in her gross income if last year her total itemized deductions exceeded the standard deduction by $350?

Helen is a U.S. citizen and CPA, who moved to London, England three years ago to work for a British company. This year, she spent the entire year in London and earned a salary of $110,000. How much of her salary will she be allowed to exclude from gross income in the U.S.?

Wherewithal-to-pay represents the principle that a realized transaction should require a taxpayer to sell other assets in order to pay income taxes.

Frank received the following benefits from his employer this year. What amount must Frank include in his gross income?

Excluded income will never be subject to the federal income tax.

A taxpayer generally includes in gross income the amount of debt forgiven by a lender.

An Introduction to Tax

Tax Compliance, the IRS, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Dependents, and Filing Status

Individual Deductions

Investments

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Filters