Question 1

A married,filing jointly taxpayer's lower limit of provisional income for social security purposes is:

Accepted Answer

A)  $44,000. 
B)  $25,000. 
C)  $34,000. 
D)  $32,000. 
A)  $44,000. 
B)  $25,000. 
C)  $34,000. 
D)  $32,000.

Question 2

Define constructive receipt.

Accepted Answer

Constructive receipt means that the inco

Question 3

Joe purchased $125,000 of A and D Corporation's newly issued bonds for $114,500.The bonds carry an interest rate of 8% and mature in 5 years.What is the initial OID on these bonds?

Accepted Answer

A)  $2,000. 
B)  $2,100. 
C)  $5,250. 
D)  $10,500. 
A)  $2,000. 
B)  $2,100. 
C)  $5,250. 
D)  $10,500.

Question 4

The following items under compensation for sickness or injury are exempt from income and do not have to be reported on the taxpayer's tax return:

Accepted Answer

A)  Sick pay. 
B)  Welfare payments. 
C)  Workers' compensation payments. 
D)  Welfare payments and workers' compensation payments. 
A)  Sick pay. 
B)  Welfare payments. 
C)  Workers' compensation payments. 
D)  Welfare payments and workers' compensation payments.

Question 5

Employer-paid premiums on life insurance are not taxable to the employees,unless the coverage is in excess of $_________________.

Accepted Answer

A)  5,000 
B)  5,250 
C)  51,000 
D)  50,000 
A)  5,000 
B)  5,250 
C)  51,000 
D)  50,000

Question 6

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 7

Discounts provided to employees for food by a restaurant owner are not taxable if the discounts do not exceed the gross profit percentage of the business.

Accepted Answer

A) True 
 B)False

Question 8

Employer-paid premiums on life insurance are not taxable to employees if the coverage does not exceed:

Accepted Answer

A)  $50,000. 
B)  $51,000. 
C)  $52,500. 
D)  $100,000. 
A)  $50,000. 
B)  $51,000. 
C)  $52,500. 
D)  $100,000.

Question 9

Tom and Betsy,who are married filing jointly,reported a standard deduction of $12,200 on their 2013 tax return.They paid $500 to the state for income taxes in 2013.In 2014,they received a $125 refund of state taxes paid in 2013.What is the amount that Tom and Betsy need to report on their 2014 tax return?

Accepted Answer

A)  $0. 
B)  $125. 
C)  $375. 
D)  $500. 
A)  $0. 
B)  $125. 
C)  $375. 
D)  $500.

Question 10

If a student must perform certain services for the educational institution (e.g.,graduate assistantships),the amount paid for services is considered:

Accepted Answer

A)  A scholarship. 
B)  A fellowship. 
C)  Wages. 
D)  All of these. 
A)  A scholarship. 
B)  A fellowship. 
C)  Wages. 
D)  All of these.

Question 11

What is the taxable amount of social security income reported on the tax return if a single taxpayer received $9,400 in social security benefits and $150 in interest income?

Accepted Answer

A)  $4,775. 
B)  $4,700. 
C)  $7,990. 
D)  $0. 
A)  $4,775. 
B)  $4,700. 
C)  $7,990. 
D)  $0.

Question 12

A taxpayer can exclude from income interest received from:

Accepted Answer

A)  A savings account established at a local bank. 
B)  A credit union. 
C)  A seller-financed mortgage transaction. 
D)  Municipal bonds issued by the state. 
A)  A savings account established at a local bank. 
B)  A credit union. 
C)  A seller-financed mortgage transaction. 
D)  Municipal bonds issued by the state.

Question 13

The taxability of social security benefits depends on the provisional income and _______.

Accepted Answer

A)  Dependency exemptions of the taxpayer 
B)  Filing status of the taxpayer 
C)  Itemized deductions of the taxpayer 
D)  Standard deduction of the taxpayer 
A)  Dependency exemptions of the taxpayer 
B)  Filing status of the taxpayer 
C)  Itemized deductions of the taxpayer 
D)  Standard deduction of the taxpayer

Question 14

Under the cash method,an individual reports income when:

Accepted Answer

A)  income is received or constructively received. 
B)  income is accrued. 
C)  income is earned. 
D)  income is received or earned. 
A)  income is received or constructively received. 
B)  income is accrued. 
C)  income is earned. 
D)  income is received or earned.

Question 15

The exclusion for dependent care assistance plans cannot exceed __________ for a taxpayer who is married but filing as "married filing separately".

Accepted Answer

A)  $5,200 
B)  $2,000 
C)  $3,500 
D)  $2,500 
A)  $5,200 
B)  $2,000 
C)  $3,500 
D)  $2,500

Question 16

If an individual owns Series EE bonds,this person must report interest income,i.e.,the increase in bond value on an annual basis.

Accepted Answer

A) True 
 B)False

Question 17

A taxpayer received a 1099-G for 2014 showing $350 of state income tax refund that he received during the year from 2013 state taxes paid.Does the taxpayer have to report the state income tax refund of $350 in 2014?

Accepted Answer

If the taxpayer used the standard deduct

Question 18

Welfare payments received by a taxpayer must be reported in income.

Accepted Answer

A) True 
 B)False

Question 19

Compensation for sickness or injury which is exempt from income includes:

Accepted Answer

A)  Unemployment compensation payments. 
B)  Damages (other than punitive damages)received as a result of personal physical injuries or sickness. 
C)  Wages for sick days paid by an employer. 
D)  All of these. 
A)  Unemployment compensation payments. 
B)  Damages (other than punitive damages)received as a result of personal physical injuries or sickness. 
C)  Wages for sick days paid by an employer. 
D)  All of these.

Question 20

Which one of the following items is not exempt under the umbrella of compensation for injuries or sickness?

Accepted Answer

A)  Payments received for damages as a result of personal physical injuries. 
B)  Employer-provided adoption assistance. 
C)  Payments received under workers' compensation acts. 
D)  Disability income received from a terrorist attack in a foreign country while employed by the U.S.government. 
A)  Payments received for damages as a result of personal physical injuries. 
B)  Employer-provided adoption assistance. 
C)  Payments received under workers' compensation acts. 
D)  Disability income received from a terrorist attack in a foreign country while employed by the U.S.government.

A married,filing jointly taxpayer's lower limit of provisional income for social security purposes is:

Define constructive receipt.

Joe purchased $125,000 of A and D Corporation's newly issued bonds for $114,500.The bonds carry an interest rate of 8% and mature in 5 years.What is the initial OID on these bonds?

The following items under compensation for sickness or injury are exempt from income and do not have to be reported on the taxpayer's tax return:

Employer-paid premiums on life insurance are not taxable to the employees,unless the coverage is in excess of $_________________.

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:

Discounts provided to employees for food by a restaurant owner are not taxable if the discounts do not exceed the gross profit percentage of the business.

Employer-paid premiums on life insurance are not taxable to employees if the coverage does not exceed:

If a student must perform certain services for the educational institution (e.g.,graduate assistantships),the amount paid for services is considered:

What is the taxable amount of social security income reported on the tax return if a single taxpayer received $9,400 in social security benefits and $150 in interest income?

A taxpayer can exclude from income interest received from:

The taxability of social security benefits depends on the provisional income and _______.

Under the cash method,an individual reports income when:

The exclusion for dependent care assistance plans cannot exceed __________ for a taxpayer who is married but filing as "married filing separately".

If an individual owns Series EE bonds,this person must report interest income,i.e.,the increase in bond value on an annual basis.

A taxpayer received a 1099-G for 2014 showing $350 of state income tax refund that he received during the year from 2013 state taxes paid.Does the taxpayer have to report the state income tax refund of $350 in 2014?

Welfare payments received by a taxpayer must be reported in income.

Compensation for sickness or injury which is exempt from income includes:

Which one of the following items is not exempt under the umbrella of compensation for injuries or sickness?

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

A married,filing jointly taxpayer's lower limit of provisional income for social security purposes is:

Define constructive receipt.

Joe purchased $125,000 of A and D Corporation's newly issued bonds for $114,500.The bonds carry an interest rate of 8% and mature in 5 years.What is the initial OID on these bonds?

The following items under compensation for sickness or injury are exempt from income and do not have to be reported on the taxpayer's tax return:

Employer-paid premiums on life insurance are not taxable to the employees,unless the coverage is in excess of $_________________.

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:

Discounts provided to employees for food by a restaurant owner are not taxable if the discounts do not exceed the gross profit percentage of the business.

Employer-paid premiums on life insurance are not taxable to employees if the coverage does not exceed:

If a student must perform certain services for the educational institution (e.g.,graduate assistantships),the amount paid for services is considered:

What is the taxable amount of social security income reported on the tax return if a single taxpayer received $9,400 in social security benefits and $150 in interest income?

A taxpayer can exclude from income interest received from:

The taxability of social security benefits depends on the provisional income and _______.

Under the cash method,an individual reports income when:

The exclusion for dependent care assistance plans cannot exceed __________ for a taxpayer who is married but filing as "married filing separately".

If an individual owns Series EE bonds,this person must report interest income,i.e.,the increase in bond value on an annual basis.

A taxpayer received a 1099-G for 2014 showing $350 of state income tax refund that he received during the year from 2013 state taxes paid.Does the taxpayer have to report the state income tax refund of $350 in 2014?

Welfare payments received by a taxpayer must be reported in income.

Compensation for sickness or injury which is exempt from income includes:

Which one of the following items is not exempt under the umbrella of compensation for injuries or sickness?

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