Reference no: EM132513137

Question 1: Victor's employer sponsors a group life insurance plan, a group disability insurance plan and a group drug and dental plan. The employer pays the premiums for the group drug and dental plan and the life insurance plan, but deducts the premiums for the disability plan from Victor's pay. What statement is true?

a) The premiums for the group life insurance plan are not a taxable benefit.

b) The premiums for the group drug and dental plan are a taxable benefit.

c) If Victor receives reimbursement from the dental plan for his family's dental expenses, that reimbursement will be considered taxable income.

d) If Victor becomes disabled and receives payments from the group disability plan, those payments will not be taxable.

Question 2: What financial statement provides a clear picture of an individual's financial status at a point in time, and readily shows how various strategies could affect his or her situation?

a) balance sheet

b) statement of cash flow

c) statement of lifestyle expenditures

d) statement of net worth

Question 3: For an individual approaching retirement, what factor would NOT shape his or her tax profile?

a) marginal tax rate during retirement

b) marginal tax rate between now and retirement

c) retirement objectives

d) previous use of capital gains exemptions

Question 4: Conner's tax return for two years ago was supposed to be filed by April 30th of last year. Conner did not file the return until September 13th of this year. At that time, he owed $14,200 in taxes. How much of a late-filing penalty will Conner incur?

a) $710

b) $1,704

c) $2,414

d) $3,124

Question 5: Denise inherited a large lump sum of money and she decided to spread the wealth by giving $50,000 each to her husband, Adam, and her adult sister, Vickie.

Vickie invested her money in an assortment of mutual funds and last year she earned capital gains of $3,000 and interest income of $1,500. Adam used his money to set up a partnership with a long-time associate, Kevin. Both Adam and Kevin actively participate in the business and it was successful from the beginning. Adam's share of the partnership income was $67,000 last year.

What was Denise's taxable income as a result of these transactions?

a) $0

b) $1,500

c) $4,500

d) $71,500