Question 1

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. B

Question 2

Employer-paid premiums on group-term life insurance in excess of $50,000 coverage are taxable to the employees based on the cost of the excess.

Accepted Answer

A) True 
 B)False  True

Question 3

Life insurance proceeds because of the death of the insured are fully excludable from the gross income of the recipient if the payment is made:

Accepted Answer

A)  It does not matter how these payments are made. 
B)  Over time. 
C)  As a lump sum. 
D)  It does not matter how these payments are made and Over time. 
A)  It does not matter how these payments are made. 
B)  Over time. 
C)  As a lump sum. 
D)  It does not matter how these payments are made and Over time. C

Question 4

Income may be realized in the form of:

Accepted Answer

A)  Property. 
B)  Cash. 
C)  Services. 
D)  All of these. 
A)  Property. 
B)  Cash. 
C)  Services. 
D)  All of these.

Question 5

Income can only be realized in money or services.

Accepted Answer

A) True 
 B)False

Question 6

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 7

Dividends are generally taxed at capital gains rates if they are made from the corporation's current earnings and profits or accumulated earnings and profits.

Accepted Answer

A) True 
 B)False

Question 8

Monique is a graduate student at a state university.In 2014,she received a scholarship of $9,000 ($7,000 for tuition and fees and $2,000 for campus housing)and a graduate assistantship that pays $6,000.What is the amount that she must report on her tax return?

Accepted Answer

A)  $2,000. 
B)  $8,000. 
C)  $6,000. 
D)  $15,000. 
A)  $2,000. 
B)  $8,000. 
C)  $6,000. 
D)  $15,000.

Question 9

What is the tax liability for a single individual who has taxable income of $115,500,that includes a taxable qualified dividend of $2,000? All answers should be rounded to the nearest dollar.

Accepted Answer

A)  $25,256. 
B)  $24,956. 
C)  $32,340. 
D)  $25,516. 
A)  $25,256. 
B)  $24,956. 
C)  $32,340. 
D)  $25,516.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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 12

Receipt of property or services will trigger income recognition.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Caroline,who files as head of household,received $9,000 of social security benefits.Her AGI before the social security benefits was $27,000.She also received $200 of tax-exempt interest.What is the amount of taxable social security benefits?

Accepted Answer

A)  $9,000. 
B)  $7,650. 
C)  $4,500. 
D)  $3,350. 
A)  $9,000. 
B)  $7,650. 
C)  $4,500. 
D)  $3,350.

Question 15

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 16

The following income item is not taxable:

Accepted Answer

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

Question 17

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

Accepted Answer

A)  $91,000. 
B)  $112,050. 
C)  $117,000. 
D)  $143,950. 
A)  $91,000. 
B)  $112,050. 
C)  $117,000. 
D)  $143,950.

Question 18

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 19

Esther is a student at a state university.In 2014,she received a scholarship of $5,000 for tuition and fees and an assistantship for $2,000.What is the amount that Esther must report in income?

Accepted Answer

A)  $7,000. 
B)  $5,000. 
C)  $0. 
D)  $2,000. 
A)  $7,000. 
B)  $5,000. 
C)  $0. 
D)  $2,000.

Question 20

Corporate distributions to shareholders that represent a nontaxable return of capital are those that are:

Accepted Answer

A)  made from current year's profit of the corporation. 
B)  made from accumulated retained earnings of the corporation. 
C)  made from the excess over earnings and profits of the corporation. 
D)  made from the bank account of the corporation. 
A)  made from current year's profit of the corporation. 
B)  made from accumulated retained earnings of the corporation. 
C)  made from the excess over earnings and profits of the corporation. 
D)  made from the bank account of the corporation.

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

Employer-paid premiums on group-term life insurance in excess of $50,000 coverage are taxable to the employees based on the cost of the excess.

Life insurance proceeds because of the death of the insured are fully excludable from the gross income of the recipient if the payment is made:

Income may be realized in the form of:

Income can only be realized in money or services.

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

Dividends are generally taxed at capital gains rates if they are made from the corporation's current earnings and profits or accumulated earnings and profits.

Monique is a graduate student at a state university.In 2014,she received a scholarship of $9,000 ($7,000 for tuition and fees and $2,000 for campus housing)and a graduate assistantship that pays $6,000.What is the amount that she must report on her tax return?

What is the tax liability for a single individual who has taxable income of $115,500,that includes a taxable qualified dividend of $2,000? All answers should be rounded to the nearest dollar.

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

The following corporate dividends are not taxable to the shareholders:

Receipt of property or services will trigger income recognition.

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

Caroline,who files as head of household,received $9,000 of social security benefits.Her AGI before the social security benefits was $27,000.She also received $200 of tax-exempt interest.What is the amount of taxable social security benefits?

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

The following income item is not taxable:

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

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

Esther is a student at a state university.In 2014,she received a scholarship of $5,000 for tuition and fees and an assistantship for $2,000.What is the amount that Esther must report in income?

Corporate distributions to shareholders that represent a nontaxable return of capital are those that are:

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

Capital Gains and Other Sales of Property

Rental Property, Royalties, and Income From Flow-Through Entities

Tax Credits

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

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

Employer-paid premiums on group-term life insurance in excess of $50,000 coverage are taxable to the employees based on the cost of the excess.

Life insurance proceeds because of the death of the insured are fully excludable from the gross income of the recipient if the payment is made:

Income may be realized in the form of:

Income can only be realized in money or services.

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

Dividends are generally taxed at capital gains rates if they are made from the corporation's current earnings and profits or accumulated earnings and profits.

Monique is a graduate student at a state university.In 2014,she received a scholarship of $9,000 ($7,000 for tuition and fees and $2,000 for campus housing)and a graduate assistantship that pays $6,000.What is the amount that she must report on her tax return?

What is the tax liability for a single individual who has taxable income of $115,500,that includes a taxable qualified dividend of $2,000? All answers should be rounded to the nearest dollar.

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

The following corporate dividends are not taxable to the shareholders:

Receipt of property or services will trigger income recognition.

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

Caroline,who files as head of household,received $9,000 of social security benefits.Her AGI before the social security benefits was $27,000.She also received $200 of tax-exempt interest.What is the amount of taxable social security benefits?

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

The following income item is not taxable:

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

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

Esther is a student at a state university.In 2014,she received a scholarship of $5,000 for tuition and fees and an assistantship for $2,000.What is the amount that Esther must report in income?

Corporate distributions to shareholders that represent a nontaxable return of capital are those that are:

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

Capital Gains and Other Sales of Property

Rental Property, Royalties, and Income From Flow-Through Entities

Tax Credits

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