Question 1

Does forgiveness of debt result in taxable income to the taxpayer (borrower)?

Accepted Answer

Generally,if a lender fully or partially

Question 2

All federal and state unemployment compensation benefits are not subject to income tax.

Accepted Answer

A) True 
 B)False

Question 3

The cost of holiday turkeys distributed to employees is included in the employees' income.

Accepted Answer

A) True 
 B)False

Question 4

Provisional income is calculated by starting with Adjusted Gross Income (AGI)before social security benefits and adding back specific items.One of these items is:

Accepted Answer

A) Qualified dividends. 
B) Deducted interest on educational loans. 
C) Capital gains. 
D) Wages. 
A) Qualified dividends. 
B) Deducted interest on educational loans. 
C) Capital gains. 
D) Wages.

Question 5

If an employee receives a prize or award from his or her employer,the award is included in W-2 income.

Accepted Answer

A) True 
 B)False

Question 6

The imputed interest rules do not apply to certain transactions.Name three situations where this is a true statement.

Accepted Answer

Examples of situations when the rules of

Question 7

Receipt of property or services will trigger income recognition.

Accepted Answer

A) True 
 B)False

Question 8

Banks and credit unions report interest income to taxpayers on Form 1099-INT.

Accepted Answer

A) True 
 B)False

Question 9

Felix,a single taxpayer,claimed $180 of state tax as an itemized deduction on his 2016 tax return.The total itemized deductions on his tax return were $6,350.In 2017,he received a $25 refund from the state.What is the amount Felix has to report on his 2017 tax return?

Accepted Answer

A) $0. 
B) $50. 
C) $180. 
D) $25. 
A) $0. 
B) $50. 
C) $180. 
D) $25.

Question 10

Describe the various situations where a taxpayer must file a Schedule B (Forms 1040A or 1040)when receiving interest income.

Accepted Answer

A taxpayer must use Schedule B (Forms 10

Question 11

Items that must be reported on line 21 (Other Income)of the Form 1040 include:

Accepted Answer

A) Wages. 
B) Jury duty pay. 
C) Capital gains. 
D) Tax-exempt dividends. 
A) Wages. 
B) Jury duty pay. 
C) Capital gains. 
D) Tax-exempt dividends.

Question 12

A taxpayer must file a Schedule B (Forms 1040A or 1040)if he or she has received taxable interest of $1,550.

Accepted Answer

A) True 
 B)False

Question 13

Income can only be realized in money or services.

Accepted Answer

A) True 
 B)False

Question 14

The following income item is not taxable:

Accepted Answer

A) Jury duty. 
B) Sick Pay. 
C) Child support. 
D) Alimony. 
A) Jury duty. 
B) Sick Pay. 
C) Child support. 
D) Alimony.

Question 15

An individual with an original issue discount (OID)instrument must report annually a portion of the OID as:

Accepted Answer

A) Interest income. 
B) Qualified dividend income. 
C) Capital gains. 
D) Miscellaneous income. 
A) Interest income. 
B) Qualified dividend income. 
C) Capital gains. 
D) Miscellaneous income.

Question 16

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

Accepted Answer

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

Question 17

If Tom,an accountant,agrees to provide accounting services to Fred,a friend,in exchange for Fred fixing Tom's office floor,then:

Accepted Answer

A) Both of them must report income on their tax returns. 
B) Fred must report income on his tax return. 
C) Neither Tom nor Fred must report income on their tax returns. 
D) Tom must report income on his tax return. 
A) Both of them must report income on their tax returns. 
B) Fred must report income on his tax return. 
C) Neither Tom nor Fred must report income on their tax returns. 
D) Tom must report income on his tax return.

Question 18

For tax purposes,name the three conditions that a transaction must meet for income recognition.

Accepted Answer

A transaction is recognized as

Question 19

The following fringe benefit provided by the employer is not taxable to the employee:

Accepted Answer

A) Vacation pay. 
B) Employer-paid premiums on group-term life insurance with coverage of $40,000 per person. 
C) Educational assistance for up to $10,000 per person. 
D) Sick pay. 
A) Vacation pay. 
B) Employer-paid premiums on group-term life insurance with coverage of $40,000 per person. 
C) Educational assistance for up to $10,000 per person. 
D) Sick pay.

Question 20

Constructive receipt means the taxpayer has:

Accepted Answer

A) Earned the income. 
B) Accrued the income. 
C) Control of the income for his or her use. 
D) Earned the income and accrued the income. 
A) Earned the income. 
B) Accrued the income. 
C) Control of the income for his or her use. 
D) Earned the income and accrued the income.

Does forgiveness of debt result in taxable income to the taxpayer (borrower)?

All federal and state unemployment compensation benefits are not subject to income tax.

The cost of holiday turkeys distributed to employees is included in the employees' income.

Provisional income is calculated by starting with Adjusted Gross Income (AGI)before social security benefits and adding back specific items.One of these items is:

If an employee receives a prize or award from his or her employer,the award is included in W-2 income.

The imputed interest rules do not apply to certain transactions.Name three situations where this is a true statement.

Receipt of property or services will trigger income recognition.

Banks and credit unions report interest income to taxpayers on Form 1099-INT.

Felix,a single taxpayer,claimed $180 of state tax as an itemized deduction on his 2016 tax return.The total itemized deductions on his tax return were $6,350.In 2017,he received a $25 refund from the state.What is the amount Felix has to report on his 2017 tax return?

Describe the various situations where a taxpayer must file a Schedule B (Forms 1040A or 1040)when receiving interest income.

Items that must be reported on line 21 (Other Income)of the Form 1040 include:

A taxpayer must file a Schedule B (Forms 1040A or 1040)if he or she has received taxable interest of $1,550.

Income can only be realized in money or services.

The following income item is not taxable:

An individual with an original issue discount (OID)instrument must report annually a portion of the OID as:

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

If Tom,an accountant,agrees to provide accounting services to Fred,a friend,in exchange for Fred fixing Tom's office floor,then:

For tax purposes,name the three conditions that a transaction must meet for income recognition.

The following fringe benefit provided by the employer is not taxable to the employee:

Constructive receipt means the taxpayer has:

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

Does forgiveness of debt result in taxable income to the taxpayer (borrower)?

All federal and state unemployment compensation benefits are not subject to income tax.

The cost of holiday turkeys distributed to employees is included in the employees' income.

Provisional income is calculated by starting with Adjusted Gross Income (AGI)before social security benefits and adding back specific items.One of these items is:

If an employee receives a prize or award from his or her employer,the award is included in W-2 income.

The imputed interest rules do not apply to certain transactions.Name three situations where this is a true statement.

Receipt of property or services will trigger income recognition.

Banks and credit unions report interest income to taxpayers on Form 1099-INT.

Felix,a single taxpayer,claimed $180 of state tax as an itemized deduction on his 2016 tax return.The total itemized deductions on his tax return were $6,350.In 2017,he received a $25 refund from the state.What is the amount Felix has to report on his 2017 tax return?

Describe the various situations where a taxpayer must file a Schedule B (Forms 1040A or 1040)when receiving interest income.

Items that must be reported on line 21 (Other Income)of the Form 1040 include:

A taxpayer must file a Schedule B (Forms 1040A or 1040)if he or she has received taxable interest of $1,550.

Income can only be realized in money or services.

The following income item is not taxable:

An individual with an original issue discount (OID)instrument must report annually a portion of the OID as:

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

If Tom,an accountant,agrees to provide accounting services to Fred,a friend,in exchange for Fred fixing Tom's office floor,then:

For tax purposes,name the three conditions that a transaction must meet for income recognition.

The following fringe benefit provided by the employer is not taxable to the employee:

Constructive receipt means the taxpayer has:

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