Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Enrolled Agent: Individual Exam 2020 > Is it taxable or nontaxable? > Flashcards

Is it taxable or nontaxable? Flashcards

1
Q

Alimony and Separate Maintenance payments?

A

prior to 2019 - taxable

2019 and after - non-taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Aid to Families with dependent children (AFDC)

A

non-taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Damages wrongful incarceration

A

non-taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Unemployment compensation

A

taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Civil damages

A

non-taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Supplemental unemployment benefits

A

Taxable

Usually union unemployment benefits that supplement government unemployment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Severance pay

A

taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Rent

A

taxable

Rented for less than 15 days - non-taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Recovery of Prior year deduction

A

Taxable - Taxes were itemized in a prior year and tax liability was reduced.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Railroad Retirement Tier 1 benefits

A

A portion may be taxable (in place of Social Security for rail road employees)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Railroad Retirement Tier 2 benefits

A

taxable

Additional retirement benefits associated with length of service with railroad

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Punitive or exemplary damages

A

Taxable - damages to teach a company a lesson for outrageous conduct

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Prizes (like the lottery)

A

taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Employee awards and bonuses

A

taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Notary fees

A

taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Discounts

A

taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Breach of Contract Payment

A

Taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Back Pay

A

taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Disability

A

Taxable - employer funded

not taxable - government funded

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Child Support

A

not taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Gifts

A

Non-taxable to a point

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Interest on EE bond for education

A

non-taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Payments to a beneficiary of a deceased employee

A

non-taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Qualified Medical Waiver payment (payments made by the state for non-medical support)

A

non-taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Relocation payments

A

non-taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Rebates/Patronage dividends for a Co-op

A

non-taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Insurance proceeds

A

non-taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Rental Income

A

Less than 15 days - not taxable

otherwise - taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Rental allowance clergymen

A

non-taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Reverse mortgages

A

non-taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Sickness and Injury payments

A

non-taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Temporary Assistance For Needy Families (TANF)

A

non-taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

Supplemental Social Security

A

Non-taxable: Benefits for the blind and disabled

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Veteran’s Benefits

A

Non-taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Worker’s Compensation

A

non-taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Payments in lieu of workman’s compensation

A

non-taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Meals and lodging for convenience of employer

A

non-taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Distribution from an inherited IRA or Annuity

A

Taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Inherited IRA or Annuity

A

non-taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

Interest on tax-free securities (muni bonds)

A

non-taxable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

Inheritance

A

non-taxable

42
Q

Dividends on Life Insurance

A

non-taxable

43
Q

Damages for injury

A

non-taxable

44
Q

Cancelled Debt

A

In general: taxable

In relation to main home: my be non-taxable

45
Q

Estate and trust income

46
Q

Hobby Income

47
Q

Military pension

48
Q

Military Pay

A

A portion can be exempt from taxes. The rest would be taxes

49
Q

Partnership, Estates and S-Corp Income (K1)

50
Q

royalties

51
Q

Income earned by a decedent but not received before death

52
Q

Wages paid with virtual currency

53
Q

Bartered goods and services

A

taxable at FMV

54
Q

Prepaid income

A

taxable in year received

55
Q

What is the formula for Gross Income?

A

Gross Income
- Adjustments/Deductions (above the line) Section 62)
—————————————————————————-
Adjusted Gross Income (AGI)
- Greater of Standard or Itemized Deductions
- Qualified Business Income Deduction
——————————————————–
Taxable Income
* Tax Rate
———————————————————-
Gross Tax Liability
- Credits
————————————————————-
Net tax liability or Refund Receivable

56
Q

Compensation for services(fees, commissions, and fringe benefits)

57
Q

self employment income

58
Q

Gains from dealing in property

59
Q

Military pay

A

Generally, taxable

Active service in a combat zone - non taxable

60
Q

Business income

61
Q

clergy fees

62
Q

dividends

63
Q

embezzled funds

64
Q

farm income

65
Q

gains from illegal activity

66
Q

gambling winnings

67
Q

Group term life insurance premiums paid by employer for coverage >$50,000

68
Q

Interest

69
Q

Mileage allowance

70
Q

Military pay (unless combat)

71
Q

Partnership Income

72
Q

Pension

73
Q

Strike/Lockout benefits

74
Q

Treasure

75
Q

accident insurance proceeds

A

non-taxable

76
Q

Annuity (cost basis element)

A

non-taxable

77
Q

Damages personal physical injury/sickness

A

non-taxable

78
Q

Gifts received

A

non-taxable

79
Q

Group term life insurance premium paid by employer for coverage up to $50,000

A

non-taxable

80
Q

Interest from local, county, city, state bonds

A

non-taxable

81
Q

Life Insurance paid on death

A

non-taxable

82
Q

Military allowance

A

non-taxable

83
Q

Welfare payments

A

non-taxable

84
Q

Income from illegal activities

85
Q

Cancellation of Debt

A

taxable unless excluded

86
Q

Employer provided unemployment benefits

87
Q

Strike benefits from a union

88
Q

Section 111 exclusion - Recovery of Benefit

A

non-taxable. An amount recovered this year for a tax benefit taken in a prior year that had no impact on GI in the prior year

89
Q

Recovery of Tax Benefit

A

Taxable. Tax payer took a deduction in a prior year and then determined he is not longer entitled to the benefit.

In the current year, the TP will include in income the amount equal to the tax benefit.

90
Q

Reimbursement for moving expenses

A

Taxable.

Exception: qualified expenses for members of the military on active duty

91
Q

Treasure Trove

A

taxable: once it is undisputed AND in the the possession of the TP

92
Q

Disability payments as a result of a terrorist act against the United States

A

non-taxable

93
Q

Life insurance proceeds to a beneficiary due to death of the insured

A

non-taxable

94
Q

Employer paid death benefits paid to a beneficiary

95
Q

Life Insurance proceeds because the owner cancelled the policy

A 
Amount Received by owner
- premiums paid
-------------------------------------------
Gain/Loss
Gain: must be recognized - taxable
Loss: not recognized - not deductible
96
Q

What amount of Life Insurance Premiums paid by the employer should be included in GI and taxed?

A 
Total Life Insurance Premiums 
- amount paid by the employee
- $50,000 allowed exclusion
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Include in GI and tax
97
Q

Union Strike Benefits

98
Q

Disability payments from made from a pension

A

100% of payment is taxable until minimum retirement age is reached then follow typical pension/annuity rules

99
Q

Reimbursement of Employee expenses

A
  1. Reimbursement = expense: non-taxable
  2. Reimbursement > expense and difference is returned to employer: not taxable
  3. Reimbursement> expense and excess is not returned : taxable
  4. No proof of expenses: 100% taxable
100
Q

Insurance payments that reimburse expenses because TP has to live outside of their main home due to disaster/damage?

A

Excluded from GI

Enrolled Agent: Individual Exam 2020 (32 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions