1. Which of the subsequent items is not included in the recipient's gross income?
A. Alimony
B. Gain on sale of an antique car
C. Unemployment compensation from a state government
D. Welfare payments from a state government
2. Which of the subsequent items is included in the recipient's gross income?
A. Life insurance death benefit
B. Legal award for punitive damages
C. Legal award for personal injury
D. Scholarship for tuition, fees, and books
3. Polly received the following items this year.
Evaluate Polly's gross income.
A. $59,600
B. $58,000
C. $53,000
D. $50,000
4.James Dean received the subsequent this year.
scholarship for college tution and fees 20,000
scholarship for college room and board 12,500
Chamber of commerce citizenship award 1,500
Inheritance from great Uncle 38,000
Determine James' gross income.
A. $12,500
B. $34,000
C. $14,000
D. None of the above.
5. Which of the subsequent is excluded from gross income?
A. $50,000 slot machine winnings
B. $13,900 value of Hawaiian vacation won on a game show
C. $85,000 Pulitzer prize for journalism
D. None of the above is excluded.
6. Which of the subsequent statements about divorce settlements is false?
A. Alimony is excluded from the recipient's gross income.
B. Alimony is an above-the-line deduction for the payer.
C. Child support is excluded from the recipient's gross income.
D. None of the above is false.
7. Mr. and Mrs. Trent divorced in 2010. Pursuant to the divorce, Mr. Trent transferred marketable securities (FMV $100,000; basis $67,000) to Mrs. Trent. In 2011, Mrs. Trent sold the securities for $112,000. Which of the subsequent statements is true?
A. Mrs. Trent recognized a $45,000 gain in 2011.
B. Mrs. Trent recognized a $12,000 gain in 2011.
C. Mrs. Trent recognized $100,000 income in 2010.
D. Mrs. Trent recognized no income in 2010 and no gain in 2011.
8. Mr. and Mrs. Shohler received $25,200 Social Security benefits in this year. Their only other source of income was Mrs. Shohler's $10,479 taxable pension from her previous employer. How much of their Social Security is included in gross income?
A. $0
B. $21420
C. $12,600
D. $25,200
9. Which of the subsequent government transfer payments is included in recipient's gross income?
A. Food stamps
B. Unemployment compensation
C. Need-based welfare payments
D. None of the above is included.
10. Six years ago, Milo Lenz, an amateur artist, sculpted a garden gnome as a gift for his mother. This year, his mother sold the gnome on eBay for $1,200. Evaluate what is the amount and character of the mother's gain?
A. No gain recognized on the sale of a personal asset.
B. $1,200 long-term capital gain.
C. $1,200 ordinary gain.
D. None of the above.
11. Three years ago, Suzanne bought a fresh personal automobile for $26,900. This year, she sold it for $19,000. Evaluate what is the amount and character of Suzanne's gain or loss?
A. No gain or loss recognized on the sale of a personal asset.
B. $7,900 ordinary loss.
C. $19,000 long-term capital gain.
D. $7,900 long-term capital loss.
12. Which of the subsequent expenditures is not a medical expense for federal tax purposes?
A. Payment for eyeglasses
B. Payment for prescription antibiotics
C. Health insurance premiums
D. All of the above are deductible medical expenses
13. Dotty incurred the subsequent medical expenses in 2012. Dotty's insurance company reimbursed therefore $8,800 of these expenses. If Dotty's AGI is $47,200, evaluate her medical expense deduction.
A. $0
B. $10,120
C. $1,320
D. $13,660
14. Using the facts in Question for expenditures in 2013, evaluate Dotty's medical expense deduction: ____________________
15. Spencer paid the following taxes this year. Evaluate Spencer's itemized deduction for taxes.
A. $5,725
B. $13,615
C. $9,025
D. $12,023