Question 1

Indicate whether each of the items listed below would be (a) included in gross income or (b) excluded from gross income for the 2016 tax year.
-Farm income

Accepted Answer

A) Included 
B) Excluded 
A) Included 
B) Excluded A

Question 2

Arthur, age 19, is a full-time student at Gordon College and is a candidate for a bachelor's degree. During 2016, he received the following amounts: What is his adjusted gross income for 2016?

Accepted Answer

A) $300 
B) $500 
C) $2,300 
D) $2,500 
E) None of the above 
A) $300 
B) $500 
C) $2,300 
D) $2,500 
E) None of the above B

Question 3

Indicate whether each of the items listed below would be (a) included in gross income or (b) excluded from gross income for the 2016 tax year.
-Child support payments

Accepted Answer

A) Included 
B) Excluded 
A) Included 
B) Excluded B

Question 4

During the tax year, Thomas and Yolanda received $24,000 in Social Security benefits. The amount of their adjusted gross income for the year was $2,000 and they received no tax-exempt interest income.
​
Calculate the amount of the Social Security benefits that Thomas and Yolanda must include in their gross income for the year.

Accepted Answer

$0. Their modified adjusted gr

Question 5

Indicate whether each of the items listed below would be (a) included in gross income or (b) excluded from gross income for the 2016 tax year.
-Wages

Accepted Answer

A) Included 
B) Excluded 
A) Included 
B) Excluded

Question 6

Indicate which of the following statements is true.

Accepted Answer

A) Dependent care plans can only be used to cover the costs of caring for a dependent child. 
B) Medical flexible spending accounts can be used to cover dentist fees. 
C) Public transportation may be covered by an employer-provided spending account, but parking can not be covered. 
D) Dependent care accounts may include day care but not preschool 
A) Dependent care plans can only be used to cover the costs of caring for a dependent child. 
B) Medical flexible spending accounts can be used to cover dentist fees. 
C) Public transportation may be covered by an employer-provided spending account, but parking can not be covered. 
D) Dependent care accounts may include day care but not preschool

Question 7

Tim receives $500 of qualified dividends from Exxon in the current year. He is in the 10 percent ordinary tax bracket. Tim's tax on the dividends will be:

Accepted Answer

A) $0 
B) $25 
C) $50 
D) $75 
E) $100 
A) $0 
B) $25 
C) $50 
D) $75 
E) $100

Question 8

Amounts received by an employee as reimbursement for medical expenses under a policy provided by the taxpayer's employer are excluded from gross income.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is nontaxable income to the recipient for tax purposes?

Accepted Answer

A) Salary income 
B) Income from real estate rental property 
C) Income from tips 
D) Inheritances 
E) None of the above 
A) Salary income 
B) Income from real estate rental property 
C) Income from tips 
D) Inheritances 
E) None of the above

Question 10

A taxpayer in the 33 percent tax bracket invests in a New York City Bond paying 5 percent interest. What taxable interest rate would provide the same after-tax return?

Accepted Answer

7.46% = 5%

Question 11

Bob is a machinist in a remote Alaskan crab-freezing plant. The plant is accessible only by boat or airplane and has no available lodging for rent. Bob's employer provides him with lodging at the plant and pays for all of his electricity, gas, and other utilities, valued at $700 per month. Is the value of the lodging taxable to Bob? Explain.

Accepted Answer

No. The lodging costs paid by

Question 12

Noncash items received as income must be included in income at their fair market value.

Accepted Answer

A) True 
 B)False

Question 13

Seymore named his wife, Penelope, the beneficiary of a $100,000 insurance policy on his life. The policy provided that, upon his death, the proceeds would be paid at a rate of $4,000 per year plus interest over a 25-year period. Seymore died June 25, 2015, and in 2016 Penelope received a payment of $5,200 from the insurance company. What amount should she include in her gross income for 2016?

Accepted Answer

A) $200 
B) $1,200 
C) $4,000 
D) $5,200 
E) None of the above 
A) $200 
B) $1,200 
C) $4,000 
D) $5,200 
E) None of the above

Question 14

Amounts received as scholarships for books and tuition may be excluded from the recipient's taxable income.

Accepted Answer

A) True 
 B)False

Question 15

Joey is a single taxpayer. Joey's employer pays $1,800 per year for his health insurance. During the year, Joey had medical expenses of $2,500 and the insurance company reimbursed him for the full $2,500. How much of the above amounts, if any, must be included in Joey's gross income? Why?

Accepted Answer

None. The health insurance pre

Question 16

A gift received from a financial institution for opening a bank account is not taxable income to the recipient.

Accepted Answer

A) True 
 B)False

Question 17

In 2016, what rate would a taxpayer pay on qualified dividend income:
a.If in the 33 percent bracket?
b.If in the 10 percent bracket?

Accepted Answer

a. 15 perc

Question 18

Answer the following questions regarding the taxability of Social Security payments.
a.Will a taxpayer with no income other than Social Security have to include the Social Security in taxable income?
b.Will a taxpayer with a large amount of municipal bond income, but no taxable income, likely have to pay tax on part of his or her Social Security?
c.What is the maximum percentage of Social Security benefits which may be subject to tax on an individual's tax return?

Accepted Answer

a. No. The taxpayer's income is below th

Question 19

As part of the property settlement related to their divorce, Stella must give Peter the house that they have been living in, while she gets 100 percent of their savings accounts. The house was purchased in Texas 15 years ago for $100,000 and is now worth $110,000. How much gain must Stella recognize on the transfer of the house to Peter? What is Peter's tax basis in the house for calculating any future sale of the house?

Accepted Answer

No gain is taxable to Stella on the tran

Question 20

Mary received the following items during the current year: What is the total amount of the above items that must be included in Mary's current year gross income?

Accepted Answer

A) $0 
B) $100 
C) $135 
D) $600 
E) $635 
A) $0 
B) $100 
C) $135 
D) $600 
E) $635

Indicate whether each of the items listed below would be (a) included in gross income or (b) excluded from gross income for the 2016 tax year. -Farm income

Arthur, age 19, is a full-time student at Gordon College and is a candidate for a bachelor's degree. During 2016, he received the following amounts: What is his adjusted gross income for 2016?

Indicate whether each of the items listed below would be (a) included in gross income or (b) excluded from gross income for the 2016 tax year. -Child support payments

Indicate whether each of the items listed below would be (a) included in gross income or (b) excluded from gross income for the 2016 tax year. -Wages

Indicate which of the following statements is true.

Tim receives $500 of qualified dividends from Exxon in the current year. He is in the 10 percent ordinary tax bracket. Tim's tax on the dividends will be:

Amounts received by an employee as reimbursement for medical expenses under a policy provided by the taxpayer's employer are excluded from gross income.

Which of the following is nontaxable income to the recipient for tax purposes?

A taxpayer in the 33 percent tax bracket invests in a New York City Bond paying 5 percent interest. What taxable interest rate would provide the same after-tax return?

Noncash items received as income must be included in income at their fair market value.

Amounts received as scholarships for books and tuition may be excluded from the recipient's taxable income.

Joey is a single taxpayer. Joey's employer pays $1,800 per year for his health insurance. During the year, Joey had medical expenses of $2,500 and the insurance company reimbursed him for the full $2,500. How much of the above amounts, if any, must be included in Joey's gross income? Why?

A gift received from a financial institution for opening a bank account is not taxable income to the recipient.

In 2016, what rate would a taxpayer pay on qualified dividend income: a.If in the 33 percent bracket? b.If in the 10 percent bracket?

Mary received the following items during the current year: What is the total amount of the above items that must be included in Mary's current year gross income?

The Individual Income Tax Return

Business Income and Expenses Part I

Business Income and Expenses Part II

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding Estimated Payments and Payroll Taxes

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters

Exam 2: Gross Income and Exclusions

Indicate whether each of the items listed below would be (a) included in gross income or (b) excluded from gross income for the 2016 tax year. -Farm income

Arthur, age 19, is a full-time student at Gordon College and is a candidate for a bachelor's degree. During 2016, he received the following amounts: What is his adjusted gross income for 2016?

Indicate whether each of the items listed below would be (a) included in gross income or (b) excluded from gross income for the 2016 tax year. -Child support payments

Indicate whether each of the items listed below would be (a) included in gross income or (b) excluded from gross income for the 2016 tax year. -Wages

Indicate which of the following statements is true.

Tim receives $500 of qualified dividends from Exxon in the current year. He is in the 10 percent ordinary tax bracket. Tim's tax on the dividends will be:

Amounts received by an employee as reimbursement for medical expenses under a policy provided by the taxpayer's employer are excluded from gross income.

Which of the following is nontaxable income to the recipient for tax purposes?

A taxpayer in the 33 percent tax bracket invests in a New York City Bond paying 5 percent interest. What taxable interest rate would provide the same after-tax return?

Noncash items received as income must be included in income at their fair market value.

Amounts received as scholarships for books and tuition may be excluded from the recipient's taxable income.

Joey is a single taxpayer. Joey's employer pays $1,800 per year for his health insurance. During the year, Joey had medical expenses of $2,500 and the insurance company reimbursed him for the full $2,500. How much of the above amounts, if any, must be included in Joey's gross income? Why?

A gift received from a financial institution for opening a bank account is not taxable income to the recipient.

In 2016, what rate would a taxpayer pay on qualified dividend income: a.If in the 33 percent bracket? b.If in the 10 percent bracket?

Mary received the following items during the current year: What is the total amount of the above items that must be included in Mary's current year gross income?

The Individual Income Tax Return

Business Income and Expenses Part I

Business Income and Expenses Part II

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding Estimated Payments and Payroll Taxes

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters