Question 1

Which of the following is not a necessary condition for income to be included in gross income?

Accepted Answer

A) income must be realized 
B) income must be paid in cash 
C) income cannot be excluded by law 
D) income must be made available to a taxpayer on the cash basis 
E) All of these 
A) income must be realized 
B) income must be paid in cash 
C) income cannot be excluded by law 
D) income must be made available to a taxpayer on the cash basis 
E) All of these

Question 2

Jake sold his car for $2,400 in cash this year.He will realize a taxable gain of $1,000 if he purchased the car for $1,400.

Accepted Answer

A) True 
 B)False

Question 3

This year Barney purchased 500 shares of Bell common stock for $20 per share.At year-end the Bell shares were only worth $2 per share.What amount can Barney deduct as a loss this year?

Accepted Answer

A) $10,000 
B) $9,000 
C) $1,000 
D) Barney can deduct $10,000 only if he includes $1,000 in his taxable income 
E) None of these - Barney is not entitled to a loss deduction. 
A) $10,000 
B) $9,000 
C) $1,000 
D) Barney can deduct $10,000 only if he includes $1,000 in his taxable income 
E) None of these - Barney is not entitled to a loss deduction.

Question 4

When an asset is sold,the taxpayer calculates the gain or loss by subtracting the tax basis of the asset from the proceeds of the sale.

Accepted Answer

A) True 
 B)False

Which of the following is not a necessary condition for income to be included in gross income?

Jake sold his car for $2,400 in cash this year.He will realize a taxable gain of $1,000 if he purchased the car for $1,400.

This year Barney purchased 500 shares of Bell common stock for $20 per share.At year-end the Bell shares were only worth $2 per share.What amount can Barney deduct as a loss this year?

When an asset is sold,the taxpayer calculates the gain or loss by subtracting the tax basis of the asset from the proceeds of the sale.

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Tax Overview

Individual Deductions

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Investments

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Filters

Exam 5: Gross Income and Exclusions

Which of the following is not a necessary condition for income to be included in gross income?

Jake sold his car for $2,400 in cash this year.He will realize a taxable gain of $1,000 if he purchased the car for $1,400.

This year Barney purchased 500 shares of Bell common stock for $20 per share.At year-end the Bell shares were only worth $2 per share.What amount can Barney deduct as a loss this year?

When an asset is sold,the taxpayer calculates the gain or loss by subtracting the tax basis of the asset from the proceeds of the sale.

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Tax Overview

Individual Deductions

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Investments

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Filters