Exam 3: Gross Income: Inclusions and Exclusions

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

Jeff owns 200 shares of Coca Cola common stock that have increased in value by $14 each. He must report the increase in income because a transaction has occurred. A transaction has not occurred so income does not need to be recognized.

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?

The imputed interest rules apply to the following:

The imputed interest rules do not apply to the following:

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

Marie is a graduate student at a state university. In 2015, she received a scholarship of $9,000 ($7,000 for tuition and fees and $2,500 for campus housing) and a graduate assistantship that pays $6,000. What is the amount that she must report on her tax return?

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

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:

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

The imputed interest rules do not apply to certain transactions. Name three situations where this is a true statement.

A taxpayer can exclude from income interest received from:

Under the cash method, an individual reports income when:

The following income item is not taxable:

In what form can a taxpayer realize income?

Robert received a tax refund in 2015 from his state, which he deducted on his prior year's return as an itemized deduction. He must report the refund in income in 2015, subject to certain computations to determine the amount that is taxable.

Corporate and mutual fund payers are required to provide shareholders a Form ________ that indicates the amount of dividends in box 1a.

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

Taxable income includes:

Income can only be realized in money or services.