Exam 3: Gross Income: Inclusions and Exclusions

If Alex,an attorney,agrees to provide legal services to a friend in exchange for the friend agreeing to fix his car,Alex and his friend will have to report income on this transaction at fair market value.

(True/False)

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Question 81

Joel 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?

(Multiple Choice)

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Question 82

In what form can a taxpayer realize income?

(Essay)

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Question 83

For most individuals,interest income comes from interest-earning deposits at banks,savings and loans,or credit unions.

(True/False)

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Question 84

Felix,a single taxpayer,claimed $180 of state tax as an itemized deduction on his 2015 tax return.The total itemized deductions on his tax return were $6,350.In 2016,he received a $25 refund from the state.What is the amount Felix has to report on his 2016 tax return?

(Multiple Choice)

4.8/5

(86)

Question 85

On December 30,2016,Robert agreed to repair a damaged house wall and started to work on that date.He will finish and get paid for the job in January of 2017.Robert needs to record the income received from his work in the year:

(Multiple Choice)

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Question 86

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

(Multiple Choice)

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Question 87

Caroline,who files as head of household,received $9,000 of social security benefits.Her AGI before the social security benefits was $27,000.She also received $200 of tax- exempt interest.What is the amount of taxable social security benefits?

(Multiple Choice)

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(75)

Question 88

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

(Multiple Choice)

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Question 89

Morris redeemed $6,000 principal of $4,500 and interest of $1,500)of Series I Savings Bonds to pay qualified higher education expenses.His qualified expenses for the year totaled $6,500 and AGI consists of wages of $32,000.What is the amount of interest that Morris can exclude from income?

(Multiple Choice)

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(67)

Question 90

Receipt of property or services will trigger income recognition.

(True/False)

5.0/5

(67)

Question 91

The original issue discount OID)rules apply to all debt instruments with OID,except:

(Multiple Choice)

4.8/5

(94)

Question 92

A taxpayer does not have to report part of an original issue discount OID)as income every year.

(True/False)

4.9/5

(85)

Question 93

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

(Multiple Choice)

4.9/5

(66)

Question 94

Lisa performed bookkeeping services for Donald charging him $650.Donald agreed that he would pay Lisa's credit card bill for the same amount.Lisa has received an economic benefit and must report $650 in income on her tax return.

(True/False)

4.9/5

(73)

Question 95

The initial original issue discount OID)on a bond is equal to the difference between the acquisition price and the maturity value.

(True/False)

4.7/5

(78)

Question 96

If a person sells his or her car to a friend for a note receivable,this person has income that needs to be reported.

(True/False)

4.9/5

(84)

Question 97

Life insurance proceeds because of the death of the insured are fully excludable from the gross income of the recipient if the payment is made:

(Multiple Choice)

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Question 98

If Lucas,an accountant,agrees to provide tax services to a neighbor in exchange for the neighbor agreeing to fix his pool,Lucas but not his neighbor will have to report income on this transaction at fair market value.

(True/False)

4.8/5

(72)

Question 99

There are some instances where a cash-basis taxpayer can report income as though he or she is an accrual basis taxpayer.

(True/False)

4.8/5

(86)

Question 100

Showing 81 - 100 of 125

If Alex,an attorney,agrees to provide legal services to a friend in exchange for the friend agreeing to fix his car,Alex and his friend will have to report income on this transaction at fair market value.

Joel 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?

In what form can a taxpayer realize income?

For most individuals,interest income comes from interest-earning deposits at banks,savings and loans,or credit unions.

Felix,a single taxpayer,claimed $180 of state tax as an itemized deduction on his 2015 tax return.The total itemized deductions on his tax return were $6,350.In 2016,he received a $25 refund from the state.What is the amount Felix has to report on his 2016 tax return?

On December 30,2016,Robert agreed to repair a damaged house wall and started to work on that date.He will finish and get paid for the job in January of 2017.Robert needs to record the income received from his work in the year:

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

Caroline,who files as head of household,received $9,000 of social security benefits.Her AGI before the social security benefits was $27,000.She also received $200 of tax- exempt interest.What is the amount of taxable social security benefits?

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

Morris redeemed $6,000 principal of $4,500 and interest of $1,500)of Series I Savings Bonds to pay qualified higher education expenses.His qualified expenses for the year totaled $6,500 and AGI consists of wages of $32,000.What is the amount of interest that Morris can exclude from income?

Receipt of property or services will trigger income recognition.

The original issue discount OID)rules apply to all debt instruments with OID,except:

A taxpayer does not have to report part of an original issue discount OID)as income every year.

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

Lisa performed bookkeeping services for Donald charging him $650.Donald agreed that he would pay Lisa's credit card bill for the same amount.Lisa has received an economic benefit and must report $650 in income on her tax return.

The initial original issue discount OID)on a bond is equal to the difference between the acquisition price and the maturity value.

If a person sells his or her car to a friend for a note receivable,this person has income that needs to be reported.

Life insurance proceeds because of the death of the insured are fully excludable from the gross income of the recipient if the payment is made:

If Lucas,an accountant,agrees to provide tax services to a neighbor in exchange for the neighbor agreeing to fix his pool,Lucas but not his neighbor will have to report income on this transaction at fair market value.

There are some instances where a cash-basis taxpayer can report income as though he or she is an accrual basis taxpayer.

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

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