Question 1

Discounts offered to employees on services cannot exceed ________ of the normal selling price.

Accepted Answer

A) 75% 
B) 5% 
C) 20% 
D) 10% 
A) 75% 
B) 5% 
C) 20% 
D) 10%

Question 2

The amount of savings bond interest exempt from tax is phased out completely when an individual is married filing jointly and his or her modified AGI reaches:

Accepted Answer

A) $93,150. 
B) $117,250. 
C) $146,300. 
D) $147,250. 
A) $93,150. 
B) $117,250. 
C) $146,300. 
D) $147,250.

Question 3

When an individual's marginal ordinary income tax rate is less than 25%,the tax rate on qualified dividends is:

Accepted Answer

A) 5%. 
B) 15%. 
C) 0%. 
D) 10%. 
A) 5%. 
B) 15%. 
C) 0%. 
D) 10%.

Question 4

Corporate and mutual fund payers are required to provide shareholders a Form ________ that indicates the amount of dividends in box 1a.

Accepted Answer

A) 1099-DVI 
B) 1099-DIV 
C) 1098-DIV 
D) 1098-INT 
A) 1099-DVI 
B) 1099-DIV 
C) 1098-DIV 
D) 1098-INT

Question 5

With OID instruments,taxpayers report annually a portion of the OID as:

Accepted Answer

A) Capital gain. 
B) Interest income. 
C) Dividend income. 
D) Tax- exempt interest income. 
A) Capital gain. 
B) Interest income. 
C) Dividend income. 
D) Tax- exempt interest income.

Question 6

Receipt of property or services does not trigger income recognition for tax purposes.

Accepted Answer

A) True 
 B)False

Question 7

The imputed interest rules apply to the following:

Accepted Answer

A) Sales of property for $3,000 or less. 
B) Sales in which all payments are due in six months or less. 
C) Sale of a personal residence. 
D) All of these. 
A) Sales of property for $3,000 or less. 
B) Sales in which all payments are due in six months or less. 
C) Sale of a personal residence. 
D) All of these.

Question 8

The following corporate dividends are not taxable to the shareholders:

Accepted Answer

A) Cash dividends. 
B) Property dividends. 
C) Stock split. 
D) None of these. 
A) Cash dividends. 
B) Property dividends. 
C) Stock split. 
D) None of these.

Question 9

When a taxpayer reports income when received,this is called the ________ method.

Accepted Answer

A) Accrual basis of accounting 
B) Cash receipts and disbursements 
C) Deferred 
D) Income tax progressive 
A) Accrual basis of accounting 
B) Cash receipts and disbursements 
C) Deferred 
D) Income tax progressive

Question 10

In what form can a taxpayer realize income?

Accepted Answer

A taxpayer can realize income

Question 11

What item should not be included in income?

Accepted Answer

A) Worker's compensation payments. 
B) Jury duty pay. 
C) Prizes and awards. 
D) Sick pay. 
A) Worker's compensation payments. 
B) Jury duty pay. 
C) Prizes and awards. 
D) Sick pay.

Question 12

Taxable income includes:

Accepted Answer

A) Sick pay. 
B) Child support payments. 
C) Welfare payments. 
D) Workers' compensation payments. 
A) Sick pay. 
B) Child support payments. 
C) Welfare payments. 
D) Workers' compensation payments.

Question 13

Taxpayers are not required to "impute interest" on a deferred payment contract for which no interest,or a low rate of interest,is stated.

Accepted Answer

A) True 
 B)False

Question 14

If Alex,an attorney,agrees to provide legal services to a friend in exchange for the friend agreeing to fix his car,Alex and his friend will have to report income on this transaction at fair market value.

Accepted Answer

A) True 
 B)False

Question 15

If the process of a transaction begins and ends with an economic benefit for the taxpayer,he or she must report it in income even though the income is specifically exempt from tax.

Accepted Answer

A) True 
 B)False

Question 16

Payments received by a taxpayer for unemployment compensation are not taxable.

Accepted Answer

A) True 
 B)False

Question 17

Payments received under workers' compensation acts are taxable to the recipient.

Accepted Answer

A) True 
 B)False

Question 18

Does forgiveness of a loan repayment by the lender represent income to the borrower?

Accepted Answer

Yes,the borrower must report income.The

Question 19

Ruth,who files as head of household,reported itemized deductions of $9,400 on her 2016 tax return.Her itemized deductions included $300 of state taxes paid.In 2017,she received a $175 refund of state taxes paid in 2016.What is the amount that Ruth needs to report on her 2017 tax return?

Accepted Answer

A) $300. 
B) $175. 
C) $100. 
D) $0. 
A) $300. 
B) $175. 
C) $100. 
D) $0.

Question 20

Robert received a tax refund in 2017 from his state,which he deducted on his prior year's return as an itemized deduction.He must report the refund in income in 2017,subject to certain computations to determine the amount that is taxable.

Accepted Answer

A) True 
 B)False

Discounts offered to employees on services cannot exceed ________ of the normal selling price.

The amount of savings bond interest exempt from tax is phased out completely when an individual is married filing jointly and his or her modified AGI reaches:

When an individual's marginal ordinary income tax rate is less than 25%,the tax rate on qualified dividends is:

Corporate and mutual fund payers are required to provide shareholders a Form ________ that indicates the amount of dividends in box 1a.

With OID instruments,taxpayers report annually a portion of the OID as:

Receipt of property or services does not trigger income recognition for tax purposes.

The imputed interest rules apply to the following:

The following corporate dividends are not taxable to the shareholders:

When a taxpayer reports income when received,this is called the ________ method.

In what form can a taxpayer realize income?

What item should not be included in income?

Taxable income includes:

Taxpayers are not required to "impute interest" on a deferred payment contract for which no interest,or a low rate of interest,is stated.

If Alex,an attorney,agrees to provide legal services to a friend in exchange for the friend agreeing to fix his car,Alex and his friend will have to report income on this transaction at fair market value.

If the process of a transaction begins and ends with an economic benefit for the taxpayer,he or she must report it in income even though the income is specifically exempt from tax.

Payments received by a taxpayer for unemployment compensation are not taxable.

Payments received under workers' compensation acts are taxable to the recipient.

Does forgiveness of a loan repayment by the lender represent income to the borrower?

Ruth,who files as head of household,reported itemized deductions of $9,400 on her 2016 tax return.Her itemized deductions included $300 of state taxes paid.In 2017,she received a $175 refund of state taxes paid in 2016.What is the amount that Ruth needs to report on her 2017 tax return?

Robert received a tax refund in 2017 from his state,which he deducted on his prior year's return as an itemized deduction.He must report the refund in income in 2017,subject to certain computations to determine the amount that is taxable.

Introduction to Taxation, the Income Tax Formula, and Form 1040EZ

Expanded Tax Formula, forms 1040A and 1040, and Basic Concepts

Adjustments for Adjusted Gross Income

Itemized Deductions

Self-Employed Business Income Line 12 of Form 1040 and Schedule C

Capital Gains and Other Sales of Property Schedule D and Form 4797

Rental Property, Royalties, and Income From Flow- Through Entities Line 17, form 1040, and Schedule E

Tax Credits Form 1040,lines 48 Through 54 and Lines 66A Through 73

Payroll Taxes

Retirement and Other Tax-Deferred Plans and Annuities

Special Property Transactions

At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

Partnership Taxation

Corporate Taxation

Filters

Exam 3: Gross Income: Inclusions and Exclusions

Discounts offered to employees on services cannot exceed ________ of the normal selling price.

The amount of savings bond interest exempt from tax is phased out completely when an individual is married filing jointly and his or her modified AGI reaches:

When an individual's marginal ordinary income tax rate is less than 25%,the tax rate on qualified dividends is:

Corporate and mutual fund payers are required to provide shareholders a Form ________ that indicates the amount of dividends in box 1a.

With OID instruments,taxpayers report annually a portion of the OID as:

Receipt of property or services does not trigger income recognition for tax purposes.

The imputed interest rules apply to the following:

The following corporate dividends are not taxable to the shareholders:

When a taxpayer reports income when received,this is called the ________ method.

In what form can a taxpayer realize income?

What item should not be included in income?

Taxable income includes:

Taxpayers are not required to "impute interest" on a deferred payment contract for which no interest,or a low rate of interest,is stated.

If Alex,an attorney,agrees to provide legal services to a friend in exchange for the friend agreeing to fix his car,Alex and his friend will have to report income on this transaction at fair market value.

If the process of a transaction begins and ends with an economic benefit for the taxpayer,he or she must report it in income even though the income is specifically exempt from tax.

Payments received by a taxpayer for unemployment compensation are not taxable.

Payments received under workers' compensation acts are taxable to the recipient.

Does forgiveness of a loan repayment by the lender represent income to the borrower?

Ruth,who files as head of household,reported itemized deductions of $9,400 on her 2016 tax return.Her itemized deductions included $300 of state taxes paid.In 2017,she received a $175 refund of state taxes paid in 2016.What is the amount that Ruth needs to report on her 2017 tax return?

Robert received a tax refund in 2017 from his state,which he deducted on his prior year's return as an itemized deduction.He must report the refund in income in 2017,subject to certain computations to determine the amount that is taxable.

Introduction to Taxation, the Income Tax Formula, and Form 1040EZ

Expanded Tax Formula, forms 1040A and 1040, and Basic Concepts

Adjustments for Adjusted Gross Income

Itemized Deductions

Self-Employed Business Income Line 12 of Form 1040 and Schedule C

Capital Gains and Other Sales of Property Schedule D and Form 4797

Rental Property, Royalties, and Income From Flow- Through Entities Line 17, form 1040, and Schedule E

Tax Credits Form 1040,lines 48 Through 54 and Lines 66A Through 73

Payroll Taxes

Retirement and Other Tax-Deferred Plans and Annuities

Special Property Transactions

At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

Partnership Taxation

Corporate Taxation

Filters