Question 1

A taxpayer must report in income imputed interest on a loan made below market interest rate.

Accepted Answer

A) True 
 B)False

Question 2

Payments received by a taxpayer for unemployment compensation are not taxable.

Accepted Answer

A) True 
 B)False

Question 3

Taxable income does not include:

Accepted Answer

A) Interest payments. 
B) Child support payments. 
C) Alimony payments. 
D) Qualified dividend payments. 
A) Interest payments. 
B) Child support payments. 
C) Alimony payments. 
D) Qualified dividend payments.

Question 4

Taxpayers are not required to "impute interest" on a deferred payment contract for which no interest,or a low rate of interest,is stated.

Accepted Answer

A) True 
 B)False

Question 5

Pedro agreed to repair a house for a client and started to work on December 30,2014.On January 2,2016,he completed the job and received payment from the client.Pedro must record the income in:

Accepted Answer

A) 2015. 
B) 2016. 
C) 2014. 
D) Both 2015 and 2016. 
A) 2015. 
B) 2016. 
C) 2014. 
D) Both 2015 and 2016.

Question 6

Employer-paid premiums on group-term life insurance in excess of $50,000 coverage are taxable to the employees based on the cost of the excess.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) Received interest income of $1,300. 
B) Received interest income of $600. 
C) Received interest income of $1,500. 
D) Received interest income of $1,750. 
A) Received interest income of $1,300. 
B) Received interest income of $600. 
C) Received interest income of $1,500. 
D) Received interest income of $1,750.

Question 8

The amount of savings bond interest exempt from tax is phased out completely when an individual is married and his or her modified AGI reaches:

Accepted Answer

A) $116,300. 
B) $92,550. 
C) $115,750. 
D) $146,300. 
A) $116,300. 
B) $92,550. 
C) $115,750. 
D) $146,300.

Question 9

If an attorney performs some estate tax work for a client and the client agrees to pay $6,000 to him and $5,000 to a local financial institution for a debt the attorney owes,the attorney has income of:

Accepted Answer

A) $11,000. 
B) $6,000. 
C) $5,000. 
D) None of these. 
A) $11,000. 
B) $6,000. 
C) $5,000. 
D) None of these.

Question 10

In general,an individual must recognize income on his or her tax return if the transaction has economic benefit,the transaction has reached a conclusion and the income from the transaction is tax-exempt income.

Accepted Answer

A) True 
 B)False

Question 11

Items that must be reported on line 21 Other Income)of the Form 1040 include:

Accepted Answer

A) Jury duty pay. 
B) Wages. 
C) Capital gains. 
D) Tax-exempt dividends. 
A) Jury duty pay. 
B) Wages. 
C) Capital gains. 
D) Tax-exempt dividends.

Question 12

For tax purposes,one of the requirements to recognize income is:

Accepted Answer

A) The transaction does not have to have an economic benefit. 
B) The transaction does not have to be completed. 
C) The income cannot be tax-exempt. 
D) None of these. 
A) The transaction does not have to have an economic benefit. 
B) The transaction does not have to be completed. 
C) The income cannot be tax-exempt. 
D) None of these.

Question 13

If Raphael,a roofer,decides to fix the roof of his neighbor,Angela,in exchange for Angela providing bookkeeping services for his business,then ________ must report income on the tax return.

Accepted Answer

A) Raphael and Angela 
B) Either Raphael or Angela 
C) Raphael 
D) Angela 
A) Raphael and Angela 
B) Either Raphael or Angela 
C) Raphael 
D) Angela

Question 14

What is the tax liability for a taxpayer who is married filing jointly with taxable income of $67,500,that includes a taxable qualified dividend of $1,000? All answers should be rounded to the nearest dollar. Use the appropriate Tax Tables or Tax Rate Schedules.

Accepted Answer

A) $8,906. 
B) $9,051. 
C) $10,125. 
D) $9,201. 
A) $8,906. 
B) $9,051. 
C) $10,125. 
D) $9,201.

Question 15

A taxpayer received a 1099-G for 2016 showing $350 of state income tax refund that he received during the year from 2015 state taxes paid.Does the taxpayer have to report the state income tax refund of $350 in 2016?

Accepted Answer

If the taxpayer used the standard deduct

Question 16

Dividends are generally taxed at capital gains rates if they are made from the corporation's current earnings and profits or accumulated earnings and profits.

Accepted Answer

A) True 
 B)False

Question 17

Employer-paid premiums on life insurance are not taxable to employees if the coverage does not exceed:

Accepted Answer

A) $50,000. 
B) $52,200. 
C) $51,000. 
D) $100,000. 
A) $50,000. 
B) $52,200. 
C) $51,000. 
D) $100,000.

Question 18

Interest income on Series EE and Series E U.S.Savings Bonds can be reported:

Accepted Answer

A) only on an annual basis. 
B) either at the maturity date or on an annual basis. 
C) only at the maturity date of the bond issue. 
D) No need to report; this type of interest income is always tax-exempt income. 
A) only on an annual basis. 
B) either at the maturity date or on an annual basis. 
C) only at the maturity date of the bond issue. 
D) No need to report; this type of interest income is always tax-exempt income.

Question 19

Which type of interest received is taxable and must be reported on the tax return?

Accepted Answer

A) Tax-exempt interest. 
B) Interest on municipal bonds. 
C) Interest on a savings account. 
D) Tax-exempt interest and interest on a savings account. 
A) Tax-exempt interest. 
B) Interest on municipal bonds. 
C) Interest on a savings account. 
D) Tax-exempt interest and interest on a savings account.

Question 20

Provisional income is calculated by starting with Adjusted Gross Income AGI)before social security benefits and adding back specific items.One of these items is:

Accepted Answer

A) Capital gains. 
B) Wages. 
C) Deducted interest on educational loans. 
D) Qualified dividends. 
A) Capital gains. 
B) Wages. 
C) Deducted interest on educational loans. 
D) Qualified dividends.

A taxpayer must report in income imputed interest on a loan made below market interest rate.

Payments received by a taxpayer for unemployment compensation are not taxable.

Taxable income does not include:

Taxpayers are not required to "impute interest" on a deferred payment contract for which no interest,or a low rate of interest,is stated.

Pedro agreed to repair a house for a client and started to work on December 30,2014.On January 2,2016,he completed the job and received payment from the client.Pedro must record the income in:

Employer-paid premiums on group-term life insurance in excess of $50,000 coverage are taxable to the employees based on the cost of the excess.

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

The amount of savings bond interest exempt from tax is phased out completely when an individual is married and his or her modified AGI reaches:

If an attorney performs some estate tax work for a client and the client agrees to pay $6,000 to him and $5,000 to a local financial institution for a debt the attorney owes,the attorney has income of:

In general,an individual must recognize income on his or her tax return if the transaction has economic benefit,the transaction has reached a conclusion and the income from the transaction is tax-exempt income.

Items that must be reported on line 21 Other Income)of the Form 1040 include:

For tax purposes,one of the requirements to recognize income is:

If Raphael,a roofer,decides to fix the roof of his neighbor,Angela,in exchange for Angela providing bookkeeping services for his business,then ________ must report income on the tax return.

What is the tax liability for a taxpayer who is married filing jointly with taxable income of $67,500,that includes a taxable qualified dividend of $1,000? All answers should be rounded to the nearest dollar. Use the appropriate ^Tax^Tablesor ^Tax^Rate^Schedules.

A taxpayer received a 1099-G for 2016 showing $350 of state income tax refund that he received during the year from 2015 state taxes paid.Does the taxpayer have to report the state income tax refund of $350 in 2016?

Dividends are generally taxed at capital gains rates if they are made from the corporation's current earnings and profits or accumulated earnings and profits.

Employer-paid premiums on life insurance are not taxable to employees if the coverage does not exceed:

Interest income on Series EE and Series E U.S.Savings Bonds can be reported:

Which type of interest received is taxable and must be reported on the tax return?

Provisional income is calculated by starting with Adjusted Gross Income AGI)before social security benefits and adding back specific items.One of these items is:

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

A taxpayer must report in income imputed interest on a loan made below market interest rate.

Payments received by a taxpayer for unemployment compensation are not taxable.

Taxable income does not include:

Taxpayers are not required to "impute interest" on a deferred payment contract for which no interest,or a low rate of interest,is stated.

Pedro agreed to repair a house for a client and started to work on December 30,2014.On January 2,2016,he completed the job and received payment from the client.Pedro must record the income in:

Employer-paid premiums on group-term life insurance in excess of $50,000 coverage are taxable to the employees based on the cost of the excess.

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

The amount of savings bond interest exempt from tax is phased out completely when an individual is married and his or her modified AGI reaches:

If an attorney performs some estate tax work for a client and the client agrees to pay $6,000 to him and $5,000 to a local financial institution for a debt the attorney owes,the attorney has income of:

In general,an individual must recognize income on his or her tax return if the transaction has economic benefit,the transaction has reached a conclusion and the income from the transaction is tax-exempt income.

Items that must be reported on line 21 Other Income)of the Form 1040 include:

For tax purposes,one of the requirements to recognize income is:

If Raphael,a roofer,decides to fix the roof of his neighbor,Angela,in exchange for Angela providing bookkeeping services for his business,then ________ must report income on the tax return.

What is the tax liability for a taxpayer who is married filing jointly with taxable income of $67,500,that includes a taxable qualified dividend of $1,000? All answers should be rounded to the nearest dollar. Use the appropriate Tax Tables or Tax Rate Schedules.

A taxpayer received a 1099-G for 2016 showing $350 of state income tax refund that he received during the year from 2015 state taxes paid.Does the taxpayer have to report the state income tax refund of $350 in 2016?

Dividends are generally taxed at capital gains rates if they are made from the corporation's current earnings and profits or accumulated earnings and profits.

Employer-paid premiums on life insurance are not taxable to employees if the coverage does not exceed:

Interest income on Series EE and Series E U.S.Savings Bonds can be reported:

Which type of interest received is taxable and must be reported on the tax return?

Provisional income is calculated by starting with Adjusted Gross Income AGI)before social security benefits and adding back specific items.One of these items is:

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

What is the tax liability for a taxpayer who is married filing jointly with taxable income of $67,500,that includes a taxable qualified dividend of $1,000? All answers should be rounded to the nearest dollar. Use the appropriate ^Tax^Tablesor ^Tax^Rate^Schedules.