Quizes Flashcards
Quiz 1
Question 1
A person finds a a pieces of eight, i.e. a gold coin, while diving. This is not a gross income to the diver?
True
False
False
Quiz 1
Question 2
If an employer pays someone’s taxes, that is considered gross income for that employee.
True
False
True
Refer to Old Colony trust case
Quiz 1
Question 3
A lawyer incorporates a business and in exchange for the services, the person who formed the corporation paints the lawyer’s house. The lawyer does not need to claim the house painting as income.
True
False
False
See Rev. Rul. 79-24
Quiz 1
Question 4
Mrs. Green Thumb grows vegetables in her back yard. She has income when she harvests her crop.
True
False
False
Quiz 1
Question 5
Mrs. Green grows crops in her backyard, after harvesting she sells the crop to someone for $100.00 She does not have income because she grew the veggies herself.
True
False
False
It is income, it does not matter she grew the veggies. However, she might have expenses to apply against the income.
Quiz 1
Question 6
A scholarship received by a student that represents compensation for his or her past, present, or future services is includible in gross income.
True
False
True
Although Sec. 117 excludes from gross income amounts received as qualified scholarships to be used for tuition and related expenses, this exclusion does not apply to any amount received that represents compensation for past, present, or future services [Sec. 117(c)].
Quiz 2
Question 1
Sarah works for Zebra Manufacturing Company, where they produce fake zebra and elk rugs. On her 10th year anniversary, she received $100.00 in cash. This is not taxable under §74.
True
False
False
Only tangible personal property is not taxable.
Quiz 2
Question 2
A person with AIDS, who based upon his Doctor’s opinion only has 6 months to live, requests an early withdrawal of their life insurance in the amount of $200,000. This distribution is taxable.
True
False
False
Please see §101(a)(1
Quiz 2
Question 3
Billy gives his daughter a 1973 Ford Mustang Convertible for her birthday. His daughter is 30 and lives by herself in another city. Billy paid $3,000 for the car in 1973, but the current fair market value of the vehicle is $20,000. What is Billy’s daughter’s basis in the vehicle?
(A) $3,000
(B) $20,000
(C) I don’t know
(D) None of the above
(B) $20,000
Please see §1015(a)
Quiz 2
Question 4
Billy died and willed the auto to his daughter ( a 1973 Ford Mustang Convertible). His daughter is 30 and lives by herself in another city. Billy paid $3,000 for the car in 1973, but the current fair market value of the vehicle is $20,000. Her basis in the auto is now:
(A) $20,000
(B) $3,000
(C) $17,000
(D) $0
(B) $3,000
Quiz 2
Question 5
In the Crane v. Commissioner, the main point of the case is:
(A) That in determining gain, one must look at the taxable basis, i.e. including original basis, less depreciation, plus or minus any debt forgiveness or assumption.
(B) The one is only taxed on the equity they have or gain from the project.
(C) The cash is not necessarily the only aspect in determining taxable income, i.e. if you only receive $100 from something, that is the taxable income.
(D) not valid
(A) That in determining gain, one must look at the taxable basis, i.e. including original basis, less depreciation, plus or minus any debt forgiveness or assumption.
Quiz 2
Question 6
You must include in income, at the time received, the fair market value of property or services you receive in bartering.
True
False
True
Bartering involves the sale or exchange of property or services (but not for cash). Reg. 1.61-2(d)(1) provides that, if services are paid for with property, the fair market value of the property must be included in income as compensation. If services are paid for by exchanging other services, the fair market value of such other services must be included in income as compensation. If property or services are received in exchange for other property, the taxpayer must compute gain or loss as if the property had been sold.
Quiz 3
Question 1
Ted and Alice were divorced this year. Ted was awarded custody of the couple’s two young children. Alice was to make the following monthly cash payments to him: Alimony $3,400 Child Support $4,500 What amount of taxable income will Ted have to report each month in 2019?
$0
Since after 2018 cant deduct or include alimony in gross income.
Quiz 3
Question 2
Which of the following is not a payment deductible as alimony?
A) Payments for the child support required by the divorce decree
B) Payments for the insurance premiums required by the divorce decree.
C) Half of the mortgage payment on a home jointly owned with your ex-spouse when required by the divorce decree
D) Payments for the medical expense of your spouse under the terms of the divorce decree
A) Payments for the child support required by the divorce decree
Quiz 3
Question 3
Todd and Susan divorced on September 2013. As a part of the divorce decree, beginning in September, Todd was to make payments of $2,000 a month for the balance of the year to Susan’s doctor for recent medical expenses, child support payments of $500 per month, and $1,500 a month for the mortgage payment on a jointly-owned home. Susan and the children will continue to live in the home. What is the amount that Todd can deduct as alimony for 2013.
$11,000
$16,000
$9,600
$4,200
$11,000
Medical $2,000 * 4 months = $8,000
Child Support = $0 (Cant deduct child support)
Joint owned home = $750*4 = $3,000
$8,000 + $3,000 = $11,000
