Question 1

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

Accepted Answer

A) True 
 B)False  False

Question 2

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

Question 3

Marie is a graduate student at a state university.In 2016,she received a scholarship of $10,500 $7,000 for tuition and fees and $3,500 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) $9,500. 
B) $6,000. 
C) $7,000. 
D) $3,500. 
A) $9,500. 
B) $6,000. 
C) $7,000. 
D) $3,500. A

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

Income may be realized in the form of:

Accepted Answer

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

Question 6

An individual must complete Schedule B Forms 1040A or 1040)if the following situation occurs:

Accepted Answer

A) Received tax-exempt interest of $700. 
B) Received interest income of $100. 
C) Received dividend income of $1,000. 
D) Received interest income of $1,500. 
A) Received tax-exempt interest of $700. 
B) Received interest income of $100. 
C) Received dividend income of $1,000. 
D) Received interest income of $1,500.

Question 7

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 8

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 9

Working condition fringes include:

Accepted Answer

A) Bonus earned by the employee. 
B) The use of an employer-provided vehicle for business purposes. 
C) Professional organization dues paid by the employer. 
D) Professional organization dues paid by the employer and the use of an employer-provided vehicle for business purposes. 
A) Bonus earned by the employee. 
B) The use of an employer-provided vehicle for business purposes. 
C) Professional organization dues paid by the employer. 
D) Professional organization dues paid by the employer and the use of an employer-provided vehicle for business purposes.

Question 10

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

Accepted Answer

Generally,if a lender fully or partially

Question 11

A taxpayer must file a Schedule B Forms 1040A or 1040)if he or she has received taxable interest of $1,550.

Accepted Answer

A) True 
 B)False

Question 12

When an individual's marginal ordinary income tax rate is 25% or more and less than 39.60%,the tax rate on qualified dividends is:

Accepted Answer

A) 15%. 
B) 5%. 
C) 10%. 
D) 0%. 
A) 15%. 
B) 5%. 
C) 10%. 
D) 0%.

Question 13

Martin redeemed $3,000 principal of $2,000 and interest of $1,000)of Series I Savings Bonds to pay qualified higher education expenses.His qualified expenses for the year totaled $2,500 and AGI consists of wages of $20,000.What is the amount of interest that Martin must include in income? Round interim calculations to three decimal places)

Accepted Answer

A) $833. 
B) $0. 
C) $1,000. 
D) $167. 
A) $833. 
B) $0. 
C) $1,000. 
D) $167.

Question 14

Tom and Betsy,who are married filing jointly,reported a standard deduction of $12,600 on their 2015 tax return.They paid $500 to the state for income taxes in 2015.In 2016,they received a $125 refund of state taxes paid in 2015.What is the amount that Tom and Betsy need to report on their 2016 tax return?

Accepted Answer

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

Question 15

When an individual's marginal ordinary income tax rate is 25% and less than 39.60%,the taxation rate on qualified dividends is 15%.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Are life insurance proceeds taxable to the recipient?

Accepted Answer

Life insurance proceeds payable because

Question 18

Taxable income includes:

Accepted Answer

A) Welfare payments. 
B) Sick pay. 
C) Child support payments. 
D) Workers' compensation payments. 
A) Welfare payments. 
B) Sick pay. 
C) Child support payments. 
D) Workers' compensation payments.

Question 19

For purposes of computing the amount of savings bond interest exempt from tax,Modified AGI is adjusted gross income plus:

Accepted Answer

A) standard deduction. 
B) deduction for moving expenses. 
C) itemized deductions. 
D) deduction for student loan interest. 
A) standard deduction. 
B) deduction for moving expenses. 
C) itemized deductions. 
D) deduction for student loan interest.

Question 20

The following corporate dividends are not taxable to the shareholders:

Accepted Answer

A) Property dividends. 
B) Stock split. 
C) Cash dividends. 
D) None of these. 
A) Property dividends. 
B) Stock split. 
C) Cash dividends. 
D) None of these.

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

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:

Marie is a graduate student at a state university.In 2016,she received a scholarship of $10,500 $7,000 for tuition and fees and $3,500 for campus housing)and a graduate assistantship that pays $6,000.What is the amount that she must report on her tax return?

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

Income may be realized in the form of:

An individual must complete Schedule B Forms 1040A or 1040)if the following situation occurs:

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

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

Working condition fringes include:

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

A taxpayer must file a Schedule B Forms 1040A or 1040)if he or she has received taxable interest of $1,550.

When an individual's marginal ordinary income tax rate is 25% or more and less than 39.60%,the tax rate on qualified dividends is:

When an individual's marginal ordinary income tax rate is 25% and less than 39.60%,the taxation rate on qualified dividends is 15%.

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

Are life insurance proceeds taxable to the recipient?

Taxable income includes:

For purposes of computing the amount of savings bond interest exempt from tax,Modified AGI is adjusted gross income plus:

The following corporate dividends are not taxable to the shareholders:

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 Line 12 of Form 1040 and Schedule C

Capital Gains and Other Sales of Property Schedule D and Form 4797

Rental Property, royalties, and Income From Flow-Through Entities Line 17, form 1040, and Schedule E

Tax Credits Form 1040, lines 46 Through 54 and Lines 66a Through 73

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

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:

Marie is a graduate student at a state university.In 2016,she received a scholarship of $10,500 $7,000 for tuition and fees and $3,500 for campus housing)and a graduate assistantship that pays $6,000.What is the amount that she must report on her tax return?

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

Income may be realized in the form of:

An individual must complete Schedule B Forms 1040A or 1040)if the following situation occurs:

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

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

Working condition fringes include:

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

A taxpayer must file a Schedule B Forms 1040A or 1040)if he or she has received taxable interest of $1,550.

When an individual's marginal ordinary income tax rate is 25% or more and less than 39.60%,the tax rate on qualified dividends is:

When an individual's marginal ordinary income tax rate is 25% and less than 39.60%,the taxation rate on qualified dividends is 15%.

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

Are life insurance proceeds taxable to the recipient?

Taxable income includes:

For purposes of computing the amount of savings bond interest exempt from tax,Modified AGI is adjusted gross income plus:

The following corporate dividends are not taxable to the shareholders:

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 Line 12 of Form 1040 and Schedule C

Capital Gains and Other Sales of Property Schedule D and Form 4797

Rental Property, royalties, and Income From Flow-Through Entities Line 17, form 1040, and Schedule E

Tax Credits Form 1040, lines 46 Through 54 and Lines 66a Through 73

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