Question 1

Susie received unemployment benefits in the current year.

Accepted Answer

A) All of the unemployment benefits are taxable. 
B) All of the unemployment benefits are non-taxable. 
C) Half of the unemployment benefits are taxable and half are non-taxable. 
D) The taxability of the unemployment benefits depends upon other income received for the year. 
A) All of the unemployment benefits are taxable. 
B) All of the unemployment benefits are non-taxable. 
C) Half of the unemployment benefits are taxable and half are non-taxable. 
D) The taxability of the unemployment benefits depends upon other income received for the year. A

Question 2

If an employer claims a business deduction for group health insurance premiums paid on behalf of his employees,the amount must be included in the employees' gross income.

Accepted Answer

A) True 
 B)False  False

Question 3

Indicate whether each of the items listed below would be (a) included in gross income or (b) excluded from gross income for the 2017 tax year.
-Inheritances

Accepted Answer

A) Included 
B) Excluded 
A) Included 
B) Excluded B

Question 4

As a Christmas thank you for being a good employee,Ed's TV Repair gave 62-year-old Edwina three shares of its stock worth $20 per share.Edwina then received dividends of $1 per share related to the stock.How much should be included in Edwina's gross income?

Accepted Answer

A) $0 
B) $3 
C) $60 
D) $63 
E) None of the above 
A) $0 
B) $3 
C) $60 
D) $63 
E) None of the above

Question 5

To promote business activity,the tax rules generally are very liberal in treating business gifts as tax-free income to the recipient.

Accepted Answer

A) True 
 B)False

Question 6

Steve worked as a tech supervisor for a computer company.In September of this year,he was laid off.He was paid unemployment compensation for the rest of the year totaling $7,000.Which of the following is true?

Accepted Answer

A) Steve will have to report all $7,000 of the unemployment compensation as income. 
B) Steve will have to report $4,600 of the unemployment compensation as income. 
C) Unemployment compensation is never taxable. 
D) As long as the unemployment compensation payments are less than the taxpayer's previous salary,they are not taxable. 
E) None of the above is true. 
A) Steve will have to report all $7,000 of the unemployment compensation as income. 
B) Steve will have to report $4,600 of the unemployment compensation as income. 
C) Unemployment compensation is never taxable. 
D) As long as the unemployment compensation payments are less than the taxpayer's previous salary,they are not taxable. 
E) None of the above is true.

Question 7

Tim receives $500 of qualified dividends from Exxon in the current year.He is in the 10 percent ordinary tax bracket.Tim's tax on the dividends will be:

Accepted Answer

A) $0 
B) $25 
C) $50 
D) $75 
E) $100 
A) $0 
B) $25 
C) $50 
D) $75 
E) $100

Question 8

Qualified dividends are given special tax treatment.Describe how they are taxed.

Accepted Answer

Qualified dividends are taxed at 0 perce

Question 9

A scholarship for room and board granted in 2017 is fully taxable to the recipient.

Accepted Answer

A) True 
 B)False

Question 10

Joey is a single taxpayer.Joey's employer pays $1,800 per year for his health insurance.During the year,Joey had medical expenses of $2,500 and the insurance company reimbursed him for the full $2,500.How much of the above amounts,if any,must be included in Joey's gross income? Why?

Accepted Answer

None.The health insurance prem

Question 11

Amounts received as scholarships for books and tuition may be excluded from the recipient's taxable income.

Accepted Answer

A) True 
 B)False

Question 12

The value of lodging provided to a professor to enable him to live near the campus is excluded from gross income.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following gifts or prizes would be considered taxable income to the person receiving the gift?

Accepted Answer

A) $5,000 given to the taxpayer by his friend 
B) A mobile home given to the taxpayer by his mother 
C) A ski boat won by the taxpayer on the Price is Right game show 
D) A Mustang GT given to the taxpayer by his brother 
E) None of the above would be considered taxable 
A) $5,000 given to the taxpayer by his friend 
B) A mobile home given to the taxpayer by his mother 
C) A ski boat won by the taxpayer on the Price is Right game show 
D) A Mustang GT given to the taxpayer by his brother 
E) None of the above would be considered taxable

Question 14

Interest on U.S.Treasury Bonds is not taxable.

Accepted Answer

A) True 
 B)False

Question 15

For the current year,the maximum percentage of Social Security benefits which might be included in a taxpayer's gross income is?

Accepted Answer

A) 0% 
B) 50% 
C) 65% 
D) 85% 
E) 100% 
A) 0% 
B) 50% 
C) 65% 
D) 85% 
E) 100%

Question 16

During the tax year,Thomas and Yolanda received $24,000 in Social Security benefits.The amount of their adjusted gross income for the year was $2,000 and they received no tax-exempt interest income.
​
Calculate the amount of the Social Security benefits that Thomas and Yolanda must include in their gross income for the year.

Accepted Answer

$0.Their modified adjusted gro

Question 17

Interest income received by a cash basis taxpayer is generally reported in the tax year it is received.

Accepted Answer

A) True 
 B)False

Question 18

Marie had a good year.She received the following prizes and awards: - an iPad from The Famous Daytime Talk Show with a fair market value of $500
- lottery winnings of $1,000 received in cash
- a plaque worth $25 plus $100 of Godiva chocolate in recognition for 100 days on the job without an accident
- a $10,000 cash prize from American Idol
​
How much of her prizes and awards should Marie report on her tax return?

Accepted Answer

A) None,they are all excluded from income 
B) $11,000;only cash prizes and awards are included 
C) $11,500;the award from her job is excluded 
D) $11,600;the plaque may be excluded 
E) $11,625;everything is included at the highest amount 
A) None,they are all excluded from income 
B) $11,000;only cash prizes and awards are included 
C) $11,500;the award from her job is excluded 
D) $11,600;the plaque may be excluded 
E) $11,625;everything is included at the highest amount

Question 19

Indicate whether each of the items listed below would be (a) included in gross income or (b) excluded from gross income for the 2017 tax year.
-Life insurance proceeds received upon the death of a family member

Accepted Answer

A) Included 
B) Excluded 
A) Included 
B) Excluded

Question 20

Toby transfers to Jim a life insurance policy with a face value of $25,000 and a cash value of $5,000 in payment of a personal debt.Jim continues to make premium payments on the policy until Toby's death.At that time,Jim had paid $1,500 in premiums.
a.How much income must Jim report when he receives the $25,000 in proceeds?
b.Would your answer be different if Toby and Jim were partners in a partnership? Why?

Accepted Answer

The answer of Toby transfers to Jim a life insurance...

Susie received unemployment benefits in the current year.

If an employer claims a business deduction for group health insurance premiums paid on behalf of his employees,the amount must be included in the employees' gross income.

Indicate whether each of the items listed below would be (a) included in gross income or (b) excluded from gross income for the 2017 tax year. -Inheritances

As a Christmas thank you for being a good employee,Ed's TV Repair gave 62-year-old Edwina three shares of its stock worth $20 per share.Edwina then received dividends of $1 per share related to the stock.How much should be included in Edwina's gross income?

To promote business activity,the tax rules generally are very liberal in treating business gifts as tax-free income to the recipient.

Steve worked as a tech supervisor for a computer company.In September of this year,he was laid off.He was paid unemployment compensation for the rest of the year totaling $7,000.Which of the following is true?

Tim receives $500 of qualified dividends from Exxon in the current year.He is in the 10 percent ordinary tax bracket.Tim's tax on the dividends will be:

Qualified dividends are given special tax treatment.Describe how they are taxed.

A scholarship for room and board granted in 2017 is fully taxable to the recipient.

Joey is a single taxpayer.Joey's employer pays $1,800 per year for his health insurance.During the year,Joey had medical expenses of $2,500 and the insurance company reimbursed him for the full $2,500.How much of the above amounts,if any,must be included in Joey's gross income? Why?

Amounts received as scholarships for books and tuition may be excluded from the recipient's taxable income.

The value of lodging provided to a professor to enable him to live near the campus is excluded from gross income.

Which of the following gifts or prizes would be considered taxable income to the person receiving the gift?

Interest on U.S.Treasury Bonds is not taxable.

For the current year,the maximum percentage of Social Security benefits which might be included in a taxpayer's gross income is?

Interest income received by a cash basis taxpayer is generally reported in the tax year it is received.

Indicate whether each of the items listed below would be (a) included in gross income or (b) excluded from gross income for the 2017 tax year. -Life insurance proceeds received upon the death of a family member

The Individual Income Tax Return

Business Income and Expenses Part I

Business Income and Expenses Part II

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding Estimated Payments and Payroll Taxes

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters

Exam 2: Gross Income and Exclusions

Susie received unemployment benefits in the current year.

If an employer claims a business deduction for group health insurance premiums paid on behalf of his employees,the amount must be included in the employees' gross income.

Indicate whether each of the items listed below would be (a) included in gross income or (b) excluded from gross income for the 2017 tax year. -Inheritances

As a Christmas thank you for being a good employee,Ed's TV Repair gave 62-year-old Edwina three shares of its stock worth $20 per share.Edwina then received dividends of $1 per share related to the stock.How much should be included in Edwina's gross income?

To promote business activity,the tax rules generally are very liberal in treating business gifts as tax-free income to the recipient.

Steve worked as a tech supervisor for a computer company.In September of this year,he was laid off.He was paid unemployment compensation for the rest of the year totaling $7,000.Which of the following is true?

Tim receives $500 of qualified dividends from Exxon in the current year.He is in the 10 percent ordinary tax bracket.Tim's tax on the dividends will be:

Qualified dividends are given special tax treatment.Describe how they are taxed.

A scholarship for room and board granted in 2017 is fully taxable to the recipient.

Joey is a single taxpayer.Joey's employer pays $1,800 per year for his health insurance.During the year,Joey had medical expenses of $2,500 and the insurance company reimbursed him for the full $2,500.How much of the above amounts,if any,must be included in Joey's gross income? Why?

Amounts received as scholarships for books and tuition may be excluded from the recipient's taxable income.

The value of lodging provided to a professor to enable him to live near the campus is excluded from gross income.

Which of the following gifts or prizes would be considered taxable income to the person receiving the gift?

Interest on U.S.Treasury Bonds is not taxable.

For the current year,the maximum percentage of Social Security benefits which might be included in a taxpayer's gross income is?

Interest income received by a cash basis taxpayer is generally reported in the tax year it is received.

Indicate whether each of the items listed below would be (a) included in gross income or (b) excluded from gross income for the 2017 tax year. -Life insurance proceeds received upon the death of a family member

The Individual Income Tax Return

Business Income and Expenses Part I

Business Income and Expenses Part II

Itemized Deductions and Other Incentives

Credits and Special Taxes

Accounting Periods and Methods and Depreciation

Capital Gains and Losses

Withholding Estimated Payments and Payroll Taxes

Partnership Taxation

The Corporate Income Tax

Tax Administration and Tax Planning

Filters