Question 1

Helen is a U.S. citizen and CPA, who moved to London, England three years ago to work for a British company. This year, she spent the entire year in London and earned a salary of $110,000. How much of her salary will she be allowed to exclude from gross income in the U.S.?

Accepted Answer

A)   $82,000
B)   $101,300
C)   $105,500
D)   $110,000
E)   All of her salary is included in gross incomeF) A) and B)
G) C) and E)

Question 2

Losses associated with personal-use assets, sales to related parties, and wash sales are not currently deductible.

Accepted Answer

A) True 
 B)False

Question 3

Jack and Jill are married. This year Jack earned $72,000 and Jill earned $80,000 and they received $4,000 of interest income from a joint savings account. How much gross income would Jack report if he files married-separate from Jill?

Accepted Answer

A)   $72,000 if they reside in a common law state.
B)   $76,000 if they reside in a community property law state.
C)   $84,000 if they reside in a common law state.
D)   $78,000 if they reside in a community property law state.
E)   All of the aboveF) B) and E)
G) All of the above

Question 4

Income is included in gross income unless a tax provision specifies that it can be deferred or excluded.

Accepted Answer

A) True 
 B)False

Question 5

This year Ann has the following stock transactions. What amount is included in her gross income if Ann paid a $200 selling commission for each sale? $$\begin{array} { | r | r | r | r | r | } 
\hline \text { Shares } & \text { Firm } & \begin{array} { r } 
\text { Total } \
\text { Purchase Price }
\end{array} & \text { Sales price } & \begin{array} { r } 
\text { Value } \
\text { at year end }
\end{array} \
\hline 100 & \text { IBM } & \$ 5,000 & & 7,000 \
\hline 200 & \text { ATT } & 7,500 & 9,500 & \
\hline 500 & \text { Dell } & 12,500 & 13,000 & \
\hline
\end{array}$$

Accepted Answer

$2,100. ATT: ($9,500 - $200) -...

Question 6

Taxpayers meeting certain home ownership and use requirements can permanently exclude up to $1,000,000 of realized gain on the sale of their principal residence.

Accepted Answer

A) True 
 B)False

Question 7

Excluded income will never be subject to the federal income tax.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following refers to the date stock options are awarded to an employee?

Accepted Answer

A)   Grant date.
B)   Exercise date.
C)   Lapse date.
D)   Vesting date.E) C) and D)
F) A) and B)

Question 9

Gambling winnings are included in gross income only to the extent that the winnings exceed gambling losses incurred during the same period.

Accepted Answer

A) True 
 B)False

Question 10

In X8, Erin had the following capital gains (losses)  from the sale of her investments: $2,000 LTCG, $25,000 STCG, ($9,000)  LTCL, and ($15,000)  STCL. What is the amount and nature of Erin's capital gains and losses?

Accepted Answer

A)   $3,000 net short-term capital gain
B)   $3,000 net long-term capital loss
C)   $4,000 net short-term capital gain
D)   $4,000 net long-term capital loss
E)   None of the aboveF) B) and C)
G) All of the above

Question 11

Rhett made his annual gambling trip to Uwin Casino. On this trip Rhett won $250 at the slots and $1,200 at poker. Also this year, Rhett made several trips to the race track, but he lost $700 on his various wagers. What amount must Rhett include in his gross income?

Accepted Answer

A)   $1,450
B)   $1,200
C)   $750
D)   $250
E)   Zero - gambling winnings are not included in gross incomeF) C) and E)
G) A) and B)

Question 12

Charles and Camilla are getting divorced. Under the terms of the decree Charles will pay Camilla $50,000 in cash in each of the next five years (or until Camilla's death or remarriage) . In addition, Charles will transfer a castle worth $2,000,000 to Camilla and pay $12,000 per year to support their son, Clyde, until he turns 19 years old. What amount (if any)  is included in Camilla's gross income this year?

Accepted Answer

A)   $2,062,000
B)   $12,000
C)   $50,000
D)   $2,050,000
E)   None of the payments are included in gross incomeF) B) and C)
G) A) and E)

Question 13

Irene's husband passed away this year. After his death, Irene received $250,000 of proceeds from life insurance on her husband, and she inherited her husband's stock portfolio worth $750,000. What amount must Irene include in her gross income?

Accepted Answer

A)   $1 million
B)   $750,000
C)   $500,000
D)   Zero but only if Irene does not opt to receive the life insurance proceeds in a lump sum
E)   Zero - none of the above benefits is included in gross incomeF) A) and B)
G) None of the above

Exam 5: Gross Income and Exclusions

Correct Answer
verified
$2,100. ATT: ($9,500 - $200) -...
View Answer

Rhett made his annual gambling trip to Uwin Casino. On this trip Rhett won $250 at the slots and $1,200 at poker. Also this year, Rhett made several trips to the race track, but he lost $700 on his various wagers. What amount must Rhett include in his gross income?

Correct Answer
verified

Which of the following refers to the date stock options are awarded to an employee?

Correct Answer
verified

Helen is a U.S. citizen and CPA, who moved to London, England three years ago to work for a British company. This year, she spent the entire year in London and earned a salary of $110,000. How much of her salary will she be allowed to exclude from gross income in the U.S.?

Correct Answer
verified

Losses associated with personal-use assets, sales to related parties, and wash sales are not currently deductible.

Correct Answer
verified

Taxpayers meeting certain home ownership and use requirements can permanently exclude up to $1,000,000 of realized gain on the sale of their principal residence.

Correct Answer
verified

Excluded income will never be subject to the federal income tax.

Correct Answer
verified

In X8, Erin had the following capital gains (losses) from the sale of her investments: $2,000 LTCG, $25,000 STCG, ($9,000) LTCL, and ($15,000) STCL. What is the amount and nature of Erin's capital gains and losses?

Correct Answer
verified

Jack and Jill are married. This year Jack earned $72,000 and Jill earned $80,000 and they received $4,000 of interest income from a joint savings account. How much gross income would Jack report if he files married-separate from Jill?

Correct Answer
verified

Gambling winnings are included in gross income only to the extent that the winnings exceed gambling losses incurred during the same period.

Correct Answer
verified

Correct Answer
verified

Irene's husband passed away this year. After his death, Irene received $250,000 of proceeds from life insurance on her husband, and she inherited her husband's stock portfolio worth $750,000. What amount must Irene include in her gross income?

Correct Answer
verified

Income is included in gross income unless a tax provision specifies that it can be deferred or excluded.

Correct Answer
verified

Exam 5: Gross Income and Exclusions

Correct Answerverified$2,100. ATT: ($9,500 - $200) -...View AnswerShow Answer

Rhett made his annual gambling trip to Uwin Casino. On this trip Rhett won $250 at the slots and $1,200 at poker. Also this year, Rhett made several trips to the race track, but he lost $700 on his various wagers. What amount must Rhett include in his gross income?

Correct AnswerverifiedShow Answer

Which of the following refers to the date stock options are awarded to an employee?

Correct AnswerverifiedShow Answer

Helen is a U.S. citizen and CPA, who moved to London, England three years ago to work for a British company. This year, she spent the entire year in London and earned a salary of $110,000. How much of her salary will she be allowed to exclude from gross income in the U.S.?

Correct AnswerverifiedShow Answer

Losses associated with personal-use assets, sales to related parties, and wash sales are not currently deductible.

Correct AnswerverifiedShow Answer

Taxpayers meeting certain home ownership and use requirements can permanently exclude up to $1,000,000 of realized gain on the sale of their principal residence.

Correct AnswerverifiedShow Answer

Excluded income will never be subject to the federal income tax.

Correct AnswerverifiedShow Answer

In X8, Erin had the following capital gains (losses) from the sale of her investments: $2,000 LTCG, $25,000 STCG, ($9,000) LTCL, and ($15,000) STCL. What is the amount and nature of Erin's capital gains and losses?

Correct AnswerverifiedShow Answer

Jack and Jill are married. This year Jack earned $72,000 and Jill earned $80,000 and they received $4,000 of interest income from a joint savings account. How much gross income would Jack report if he files married-separate from Jill?

Correct AnswerverifiedShow Answer

Gambling winnings are included in gross income only to the extent that the winnings exceed gambling losses incurred during the same period.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Irene's husband passed away this year. After his death, Irene received $250,000 of proceeds from life insurance on her husband, and she inherited her husband's stock portfolio worth $750,000. What amount must Irene include in her gross income?

Correct AnswerverifiedShow Answer

Income is included in gross income unless a tax provision specifies that it can be deferred or excluded.

Correct AnswerverifiedShow Answer

Correct Answer
verified
$2,100. ATT: ($9,500 - $200) -...
View Answer

Correct Answer
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