What amount must joyce include in gross income for december

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Questions -

Q1. On July 1, 20x1, a dance studio received $3,600 for 72 dance lessons to be given over the next 3 years. Thirty lessons were given in both 20x1 and 20x2; the remaining 12 lessons were given in 20x3. The studio uses the accrual method of accounting. How much of the $3,600 is included in gross income in 20x1, 20x2, and 20x3?

Q2. Joyce is self-employed. She uses the calendar year and the cash method of accounting. What amount must Joyce include in gross income for December? She reports the following activities for December:

Received $10,000 from clients for services to be performed next year

Received $30,000 for services performed in December

Records $15,000 in accounts receivable for work performed in December

Received $2,000 for services performed in November

Q3. Dan's taxable income falls in the 10% tax bracket. Included in his taxable income is $5,000 of ordinary dividends, of which $2,000 are qualified dividends. The amount of tax Dan will pay on his qualified dividends is?

Q4. A corporation issues a 30-year, $10,000 bond for less than face value (at a discount). At the time the bond is issued, the tax law will consider the OID to be de minimis if it does not exceed?

Q5. As part of their divorce agreement, Harry transfers to Mary, his former spouse, GM stock with a market value of $30,000. Harry had $20,000 invested in the stock. How does this transfer affect Harry, and what is Mary's basis in the stock?

Q6. An employee receives $100 in tips during March. She reports the tips to her employer. Which of the following statements is correct regarding tips?

A) The employer adds the $100 to the employee's wages and withholds income tax, social security tax, and Medicare tax on the amount.

B) The employer reports the $100 as allocated tips on the employee's W-2.

C) The employer adds the tips to the employee's wages and withholds income taxes, but not social security or Medicare taxes, on the amount.

D) The employer adds the tips to the employee's wages and withholds social security and Medicare taxes, but not income taxes, on the amount.

Q7. On November 1 of the current year, a cash basis investor pays $10,208 for bonds. The bonds pay $250 interest on June 1 and December 1. Included in the purchase price is $208 of accrued interest. On December 1 of the current year, the corporation pays the investor $250. What amount does the investor include in gross income in the current year?

Q8. On August 1 of the current year, an unmarried taxpayer retires and begins receiving monthly pension checks in the amount of $2,200. During her working years, the taxpayer contributed $5,720 to her employer's pension plan with after-tax dollars. Using the taxpayer's age at the time the payments begin, the taxpayer's number of expected monthly payments is 260. Of the $11,000 in pension benefits the taxpayer received during the current year, what amount must she include in gross income?

Q9. Timmy, age 8, received taxable interest of $4,400 during the year. He has no other income, and no itemized deductions. Timmy is a dependent of his parents. Which of the following statements is true?

A) The kiddie tax does apply; $2,300 will be taxed at his parents' rate, and $1,050 will be taxed at Timmy's rate

B) The kiddie tax does apply; $4,400 will be taxed at his parents' rate

C) The kiddie tax does not apply; $4,400 is taxable at Timmy's rate

D) The kiddie tax does apply; $2,300 will be taxed at his parents' rate, and $2,100 will be taxed at Timmy's rate

E) The kiddie tax does not apply; $3,350 will be taxed at Timmy's rate

Q10. Brian, a calendar-year taxpayer, purchased an annuity contract which started paying him $54 each month on June 1, of the current year. The annuity cost him $2,400, and it has an expected return of $7,200. How much of this annuity is includable in gross income for the current year?

Q11. An unmarried taxpayer itemized deductions in 20x1. The taxpayer's itemized deductions were $6,850; the standard deduction amount that year was $6,300. Included in the taxpayer's itemized deductions were $3,700 of state income tax withheld. In 20x2, the taxpayer receives an $800 refund check from the state government. What amount must the taxpayer include in gross income in 20x2?

Q12. Joe is a married taxpayer who files separately from his spouse. He has modified AGI of $125,000 (including $2,500 of net investment income). His net investment income (NII) tax is?

Q13. Melanie's taxable income falls in the 37% tax bracket. Included in her taxable income is $15,000 of ordinary dividends, all of which are qualified dividends. The amount of tax Melanie will pay on her qualified dividends is?

Q14. John pays his former wife Rose $3,100 in alimony and $400 in child support each month. Assuming John makes all 12 payments during the year, how much of the $42,000 must Rose include in gross income?

Q15. For cash basis taxpayers, interest earned on US Savings bonds is?

A) Fully taxable; the interest may be reported in the year earned or in the year the bond is redeemed (as long as the taxpayer chooses the same treatment for all savings bonds they own)

B) Not taxable

C) Fully taxable, and must be reported in the year that it is earned

D) Fully taxable, and must be reported in the year the bond is redeemed

Q16. Is illegal income taxable or not taxable?

Q17. Without regard to any AGI limitation, child support is?

A) Deductible for the spouse paying it; taxable for the spouse receiving it

B) Not deductible for the spouse paying it; taxable for the spouse receiving it

C) Not deductible for the spouse paying it; not taxable for the spouse receiving it

D) Deductible for the spouse paying it; not taxable for the spouse receiving it

Q18. Jim and Kathy file a joint return; they have modified AGI of $260,000 (including $15,000 of net investment income). Their net investment income (NII) tax is?

Q19. Are tips of $10 taxable or not taxable?

Q20. By law, Darryl is required to make monthly alimony and child support payments of $2,000 and $3,000, respectively. During the year, Darryl pays a total of $50,000 to his ex-wife. What amount must the ex-wife include in gross income?

Q21. Without regard to any AGI limitation, alimony is?

A) Deductible for the spouse paying it; taxable for the spouse receiving it

B) Not deductible for the spouse paying it; taxable for the spouse receiving it

C) Not deductible for the spouse paying it; not taxable for the spouse receiving it

D) Deductible for the spouse paying it; not taxable for the spouse receiving it

Q22. Employees are required to report the amount of tips they receive to their employer when their tips for the month exceed?

Q23. A single taxpayer with modified AGI of $227,000 has $31,500 of net investment income. The taxpayer's net investment income (NII) tax is?

Q24. Which of the following items is taxable to the employee receiving them? List all that apply.

A) Sales commissions

B) Holiday bonus of $2,000

C) Sick pay

D) Vacation pay

E) Wages

Q25. Over the years, Kevin has made nondeductible contributions to his traditional IRA totaling $50,000. The ending balance of his IRA at the end of the year is $70,000. During the year, Kevin withdrew $10,000 from his IRA, which is not subject to the 10% penalty. How much of his withdrawal is taxable?

Q26. Joan's taxable income falls in the 32% tax bracket. Included in her taxable income is $20,000 of ordinary dividends, of which $15,000 are qualified dividends. The amount of tax Joan will pay on her qualified dividends is?

Q27. Social Security benefits received during the year?

A) Are fully taxable for all recipients

B) Are tax-free for all recipients

C) May be fully taxable for some recipients

D) May be partially taxable for some recipients

Q28. Joyce is self-employed. She uses the calendar year and the accrual method of accounting. What amount must Joyce include in gross income for December? She reports the following activities for December:

Received $10,000 from clients for services to be performed next year

Received $30,000 for services performed in December

Records $15,000 in accounts receivable for work performed in December

Received $2,000 for services performed in November.

Reference no: EM132183929

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