Exam 2: Gross Income and Exclusions

Marie had a good year. She received the following prizes and awards: - an iPad from The Famous Daytime Talk Show with a fair market value of $500 - lottery winnings of $1,000 received in cash - a plaque worth $25 plus $100 of Godiva chocolate in recognition for 100 days on the job without an accident - a $10,000 cash prize from American Idol ​ How much of her prizes and awards should Marie report on her tax return?

Jim, a single individual, was unemployed for a few months during the current year. During the year, he received $3,600 in unemployment compensation payments. How much of his unemployment compensation payments must be included in gross income?

When calculating the exclusion ratio for an annuity, the ratio should be revised when there is a significant change in the taxpayer's status or health.

For divorces after 1984, which of the following statements about alimony payments is not correct?

Which of the following would result in life insurance proceeds that are taxable to the recipient?

All of the following amounts must be included in gross income, except:

If a divorce agreement executed in the current year specifies that a portion of the amount of an alimony payment is contingent upon the status of a child, that portion is considered to be a child support payment.

Under the terms of a property settlement executed during the current year, Cindy transferred a house worth $350,000 to her ex-husband, Carl. The property has a tax basis to Cindy of $300,000. a.How much taxable gain or loss must be recognized by Cindy at the time of the transfer? b.What is Carl's tax basis in the property he received from Cindy?

William, a single taxpayer, works for the men's clothing division of a large corporation. During the year, William received the following fringe benefits: As a result of receiving the above fringe benefits, what amount must William include in his current year gross income?

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. -Life insurance proceeds received upon the death of a family member

In regards to Social Security benefits:

Which of the following amounts must be included in the gross income of the recipient?

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. -Unemployment compensation

Which taxpayer would benefit the most from a tax-free municipal bond compared to a taxable bond?

In June of the current year, a wealthy aunt gave Janie a stock portfolio worth $150,000. During the year, she collects $4,000 in dividends. How much of these amounts, if any, should Janie include in gross income for the current year? Why?

Marco and his family are covered by his company's health insurance plan. The health insurance costs his company $2,500 a year. During the year, Marco's daughter is diagnosed with a serious illness and the health insurance pays $25,000 for treatment. How much of the insurance and treatment costs are taxable to Marco?

Elmore receives a rental property as an inheritance from his grandmother. The rental is worth $500,000 and Elmore collected rental income of $24,000 during the year. For the year, how much is Elmore's gross income as a result of the inheritance?

Which of the following is correct?

Tim receives a $25,000 gift from his parents for a down payment on a house. They know he can not buy a house without their help. They write "gift" in the memo line of the check. How much of the gift is taxable to Tim?

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. -Reimbursement of hospital expenses from a health insurance plan