Exam 2: Gross Income and Exclusions

Robert works for American Motors.American Motors pays a $1,200 premium on Robert's health insurance in 2017.Robert has an operation on his big toe in 2017 that cost $7,200.The insurance company paid for $6,800 of it.Which one of the following is true for 2017?

A gift received from a financial institution for opening a bank account is not taxable income to the recipient.

Karina receives a scholarship of $10,000 to a college.She is also given a job which pays $5,000 a year to help with her expenses.$7,000 of the scholarship is earmarked for tuition and $3,000 is for room and board.How much of the money from the scholarship and the job are taxable to Karina?

If a taxpayer holding EE bonds makes an election with respect to the taxation of the bonds,how is the interest which accrues on the bonds,but is not paid,taxed each year?

The receipt of an inheritance is excluded from the taxable income of the recipients.

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. -Unemployment compensation

Craig,a single taxpayer,received the following items in 2017: dividends of $450,wages (which include the public transportation reimbursement from his employer)of $32,000,child support from his ex-spouse of $400 per month,a new television worth $1,200 from a door prize at a conference he attended,a gift of $3,000 from Craig's parents,and $200 of interest on bonds issued by the State of Arizona.Craig put $4,000 of his wages into his employer's dependent care flexible spending account (the $4,000 has not been deducted from the $32,000 of wages listed previously).He also receives a reimbursement of $270 per month to pay for public transportation passes each month (the monthly reimbursement of $270 has not been deducted from the $32,000 of wages).Based on the above,what is Craig's gross income in 2017?

Child support payments are deductible by the spouse making the payments.

Payments made by an employer for health insurance on behalf of an employee are considered income to the employee at the time the payments are made.

Disability benefits are generally taxable to the individual receiving the amounts.

Rob is 8 years old and won a sports car valued at $30,000 in a drawing at Disneyland this year.How much income,if any,must Rob report on his tax return for this year? Why?

Elsie received the following distributions from Virginiana Mutual Fund for the calendar year 2017: Elmer,Elsie's husband,did not own any of the Virginiana Mutual Fund shares,but he did receive $1,600 in interest on a savings account at the Moss National Bank.Elmer and Elsie filed a joint income tax return for 2017.What portion of the distributions from Virginiana Mutual Fund is taxable as ordinary income on their 2017 individual income tax return?

The amount of employee reimbursement in 2017 for parking and mass transit costs are each $255 per month.

Basketball superstar Steph Curry's outstanding player award is not includible in income,since the award is in recognition of his outstanding performance.

William,a single taxpayer,works for the men's clothing division of a large corporation.During the year,William received the following fringe benefits: As a result of receiving the above fringe benefits,what amount must William include in his current year gross income?

Arthur,age 19,is a full-time student at Gordon College and is a candidate for a bachelor's degree.During 2017,he received the following amounts: What is his adjusted gross income for 2017?

Which of the following are not excludable as an employee fringe benefit?

Cash allowances for meals or lodging generally must be included in the employee's income.

Awards,bonuses,and gifts are all included in gross income.

For divorces after 1984,which of the following statements about alimony payments is not correct?