chocolate oatmeal

Question 1

Patrick received a fringe benefit of group-term life insurance of $200,000. the cost of issuance is $2 per $1,000 of coverage. what amount must be included in gross income?

Answer 1

$300

200k - 50k = 150k
150k/1k = 150
150 * 2 = $300

Question 2

a retiree invested $100,000 in an annuity that pays $12,000 per year for 10 years. what portion of the first payment should be included in gross income?

Answer 2

$2,000

12,000 * 10 = 120,000
120,000 - 100,000 = 20,000
20,000 / 10 = 2,000

$100,000 is a return on capital

Question 3

when would a state tax refund from prior year be taxable?

Answer 3

if it was itemized

Question 4

in a multiple support agreement, what factors must be present for each taxpayer to claim a dependent?

Answer 4

combination of support must be greater than 50%
each taxpayer must support more than 10%

Question 5

if an S corp has a [percentage] of passive income for [# of years] consecutive years, then the S election is terminated

Answer 5

25%
3 consecutive years

Question 6

“pursuant to a plan reorganization” is keyword for a recognized gain of:

Answer 6

$0

Question 7

how to find apportionment factor?

Answer 7

add up proportions separately then find the average across the board

Question 8

how much can be gifted per recipient per year tax free?

Answer 8

$16,000

Question 9

Fred bought a plot of land with a cash payment of $40,000 and a mortgage of $50,000. in addition, he paid $200 for title insurance. what’s his basis in the land?

Answer 9

$90,200

Question 10

how much employer reimbursement for education can be excluded from taxable income?

Answer 10

$5,250

Question 11

an employer pays $1,200 premiums for a disability policy that would cover an employee in the event of lost wages due to sickness or accident. how much is taxable/deductible to the
- employee
- employer

Answer 11

$0 taxable to employee until benefits are collected
$1,200 deductible by employer

Question 12

when is a gift tax return needed?

Answer 12

when the gift exceeds $16,000 and not paid directly to the provider

Question 13

June 15: Jack offered Jill a lawn mower for $150. Jill had until June 20th to accept the offer

June 16: Jack sells the lawn mower to John.

June 17: Jill accepts the offer to buy the lawn mower

Was Jack allowed to sell John the lawn mower?

Answer 13

Yes

Jill did not pay to keep an option open so Jack did not have to hold the lawn mower for Jill until June 20th.

Question 14

what does a past due acceptance become?

Answer 14

counteroffer