Exam 3: Gross Income: Inclusions and Exclusions

An individual with an original issue discount OID)instrument must report annually a portion of the OID as:

An example of nontaxable income is:

If an employee receives a prize or award from his or her employer,the award is included in W-2 income.

A de minimis benefit is one whose value is so small that keeping track of which employees received the benefit is administratively impractical.

If the process of a transaction begins and ends with an economic benefit for the taxpayer,he or she must report it in income even though the income is specifically exempt from tax.

The imputed interest rules apply to the following:

When a taxpayer reports income when received,this is called the ________ method.

Imputed interest rules apply to term loans or demand loans in which the interest rate is less than the Applicable Federal Rate AFR).Which of the following transaction does not fall under these rules? Assume in all situations that interest is below the AFR.

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

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.

If a taxpayer is economically better off because of a transaction,the person must normally record income.

Jury duty pay is taxable income,but it can be deducted from gross income if the amount must be given to the employer.

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?

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

When filing their tax returns,almost all individuals use:

The following fringe benefit provided by the employer is not taxable to the employee:

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

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

Robert received a tax refund in 2016 from his state,which he deducted on his prior year's return as an itemized deduction.He must report the refund in income in 2016,subject to certain computations to determine the amount that is taxable.

Jeff owns 250 shares of Coca Cola common stock that have increased in value by $15 each.He must report the increase in income because a transaction has occurred.