FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 5: Gross Income and Exclusions

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Multiple Choice

Review LaterAdd Note

Review Later

Ophra is a cash basis taxpayer who is employed in the publishing industry.This year her employer informed her that because of her outstanding performance she is entitled to a free world cruise.Ophra asked her employer to issue the cruise tickets to her parents,and he complied with this request.Identify the principle that will determine whether Ophra or her parents are taxed on the value of the cruise tickets:

A) Assignment of income.
B) Constructive receipt.
C) Return of capital principle.
D) Wherewithal to pay.
E) All of the choices are correct.

F) A) and E)
G) B) and C)

Correct Answer

verified

Show Answer

Question 32

Multiple Choice

Review LaterAdd Note

Review Later

Gross income includes:

A) all income from whatever source derived unless excluded by law.
B) excluded income.
C) deferred income.
D) all realized income.
E) All of the choices are correct.

F) A) and D)
G) A) and C)

Correct Answer

verified

Show Answer

Question 33

Essay

Review LaterAdd Note

Robert will be working overseas on a permanent assignment for an international company beginning on March 1 of this year (306 days this year).His salary is $11,000 per month while Robert is overseas,but only $9,200 per month otherwise.What is the minimum amount of Robert's salary that he must include in gross income this year? (Round your final answer to the nearest whole dollar amount & assume that there are 365 days in this year).

This year Ed celebrated his 25ᵗʰ year as an employee of Designer Jeans Company.In recognition of his long and loyal service,the company awarded Ed a gold watch worth $250 and a $2,000 cash bonus.What amount must Ed include in his gross income?

Frank received the following benefits from his employer this year.What amount must Frank include in his gross income?

In April of this year Victoria received a $1,400 refund of state income taxes that she paid last year.Last year Victoria claimed itemized deductions of $8,890.Victoria's itemized deductions included state income taxes paid of $3,750.How much of the refund,if any,must Victoria include in gross income if the standard deduction last year was $6,300?

Rental income generated by a partnership is reported by the partners as dividend income on their own individual tax returns.

This year Ann has the following stock transactions.What amount is included in her gross income if Ann paid a $200 selling commission for each sale?

Sally is a cash basis taxpayer and a member of the Valley Barter club.This year Sally provided 100 hours of sewing services to the barter club in exchange for two football playoff tickets.Which of the following is a true statement?

Kathryn is employed by Acme and they have been very pleased with her performance this year.In December Kathryn was granted an extra week off with pay (pay for the week totaled $2,000).In addition,Kathryn was given tickets to a football bowl game worth $800 (Kathryn didn't use the tickets - she hates football).Just right before year-end Kathryn was allowed to order new office furniture and Acme told her to take the old office furniture home.The office furniture was originally purchased for $7,000,but it was fully depreciated and only worth about $1,000.Determine the amount Kathryn should include in her gross income

Aubrey and Justin divorced on June 30 of this year.Through June 30 Aubrey earned $62,000 of salary and Justin earned $45,000.For the year Aubrey reported a total salary of $130,000 and Justin earned a total salary of $88,000.Aubrey and Justin live in a community property state.How much of the income will Aubrey report on her tax return for this year?

Worker's compensation benefits are excluded from gross income.

This fall Angelina,age 35,plans to attend college.To fund her tuition she cashed in Series EE savings bonds with a redemption value of $24,000 and an original cost of $16,800.Angelina plans on spending $7,200 of the proceeds to pay tuition.The redemption proceeds are Angelina's only source of income.What amount of interest must Angelina include in gross income this year?

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.

Constructive receipt represents the principle that cash basis taxpayers will be taxed on income when it is made available to them without substantial restrictions.

Rhett made his annual gambling trip to Uwin Casino.On this trip Rhett won $250 at the slots and $1,200 at poker.Also this year,Rhett made several trips to the race track,but he lost $700 on his various wagers.What amount must Rhett include in his gross income?

To provide relief from double taxation,Congress allows a foreign-unearned income exclusion for interest and dividends earned in foreign countries.

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

Generally,85 percent of Social Security benefits are included in income of high income taxpayers.

Deb has found it very difficult to repay her loans.Because of these difficulties,the bank decided to forgive one of her most recent loans,an amount of $45,000.After the loan was discharged,Deb had total assets of $232,000 and her remaining loans total $217,000.What amount must Deb include in her gross income?