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

Name three types of nontaxable income (do not include items that are exempt under the umbrella of compensation for injuries or sickness).

Accepted Answer

Examples of nontaxable income are: 1.Chi

Question 3

A taxpayer does not have to report part of an original issue discount (OID)as income every year.

Accepted Answer

A) True 
 B)False

Question 4

A stock dividend in which a shareholder has the option to receive cash is not taxable.

Accepted Answer

A) True 
 B)False

Question 5

If Thomas,a roofer,decides to fix the roof of his neighbor,Angela,in exchange for Angela providing bookkeeping services for his business,then ____________ must report income on the tax return.

Accepted Answer

A)  Thomas 
B)  Thomas and Angela 
C)  Angela 
D)  Either Thomas or Angela 
A)  Thomas 
B)  Thomas and Angela 
C)  Angela 
D)  Either Thomas or Angela

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

When is an original issue discount (OID)created? How is the initial OID computed?

Accepted Answer

An original issue discount (OID)is creat

Question 8

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 9

Are life insurance proceeds taxable to the recipient?

Accepted Answer

Life insurance proceeds payable because

Question 10

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 11

There are some instances where a cash-basis taxpayer can report income as though he or she is an accrual basis taxpayer.

Accepted Answer

A) True 
 B)False

Question 12

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 13

Rose,who files as head of household,reported itemized deductions of $9,050 on her 2013 tax return.Her itemized deductions included $300 of state taxes paid.In 2014,she received a $175 refund of state taxes paid in 2013.What is the amount that Rose needs to report on her 2014 tax return?

Accepted Answer

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

Question 14

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.

Question 15

The initial original issue discount (OID)on a bond is equal to the difference between the acquisition price and the maturity value.

Accepted Answer

A) True 
 B)False

Question 16

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 17

Tax-exempt interest includes the following items,except:

Accepted Answer

A)  interest on bonds issued by the local government to build a convention center. 
B)  interest on bonds issued by any state. 
C)  interest on bonds issued by the District of Columbia. 
D)  interest on municipal bonds. 
A)  interest on bonds issued by the local government to build a convention center. 
B)  interest on bonds issued by any state. 
C)  interest on bonds issued by the District of Columbia. 
D)  interest on municipal bonds.

Question 18

Interest on state bonds is tax-exempt if the bonds were issued for private activities,such as convention centers,industrial parks,or stadiums.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

Yes,the borrower must report income.The

Question 20

In what form can a taxpayer realize income?

Accepted Answer

A taxpayer can realize income

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

Name three types of nontaxable income (do not include items that are exempt under the umbrella of compensation for injuries or sickness).

A taxpayer does not have to report part of an original issue discount (OID)as income every year.

A stock dividend in which a shareholder has the option to receive cash is not taxable.

If Thomas,a roofer,decides to fix the roof of his neighbor,Angela,in exchange for Angela providing bookkeeping services for his business,then ____________ must report income on the tax return.

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

When is an original issue discount (OID)created? How is the initial OID computed?

What item should not be included in income?

Are life insurance proceeds taxable to the recipient?

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

There are some instances where a cash-basis taxpayer can report income as though he or she is an accrual basis taxpayer.

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

Rose,who files as head of household,reported itemized deductions of $9,050 on her 2013 tax return.Her itemized deductions included $300 of state taxes paid.In 2014,she received a $175 refund of state taxes paid in 2013.What is the amount that Rose needs to report on her 2014 tax return?

Constructive receipt means the taxpayer has:

The initial original issue discount (OID)on a bond is equal to the difference between the acquisition price and the maturity value.

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

Tax-exempt interest includes the following items,except:

Interest on state bonds is tax-exempt if the bonds were issued for private activities,such as convention centers,industrial parks,or stadiums.

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

In what form can a taxpayer realize income?

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

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

Name three types of nontaxable income (do not include items that are exempt under the umbrella of compensation for injuries or sickness).

A taxpayer does not have to report part of an original issue discount (OID)as income every year.

A stock dividend in which a shareholder has the option to receive cash is not taxable.

If Thomas,a roofer,decides to fix the roof of his neighbor,Angela,in exchange for Angela providing bookkeeping services for his business,then ____________ must report income on the tax return.

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

When is an original issue discount (OID)created? How is the initial OID computed?

What item should not be included in income?

Are life insurance proceeds taxable to the recipient?

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

There are some instances where a cash-basis taxpayer can report income as though he or she is an accrual basis taxpayer.

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

Rose,who files as head of household,reported itemized deductions of $9,050 on her 2013 tax return.Her itemized deductions included $300 of state taxes paid.In 2014,she received a $175 refund of state taxes paid in 2013.What is the amount that Rose needs to report on her 2014 tax return?

Constructive receipt means the taxpayer has:

The initial original issue discount (OID)on a bond is equal to the difference between the acquisition price and the maturity value.

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

Tax-exempt interest includes the following items,except:

Interest on state bonds is tax-exempt if the bonds were issued for private activities,such as convention centers,industrial parks,or stadiums.

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

In what form can a taxpayer realize income?

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