Income Tax

Emelyn Rodriguez

Chapter 2: Homework Assignment

Due: 09/10/14

Multiple Choice Questions: Group 1: Questions 1-12

1. C. (All income from whatever source derived.)

2. C. (Child support.)

3. B. (Damages for physical personal injury.)

4. A. (Welfare payments.)

5. D. (Hobby income.)

6. E. (All of the above are taxable.)

7. E. (None of the above.)

8. C. (A life insurance policy transferred to a creditor in payment of a debt.)

9. B. (A trip to Mexico given to a purchasing agent by one of the company’s supplies.)

10. C. (Season tickets given by a salesperson to a customer.)

11. A. (85%.)

12. E. (Plus tax-exempt interest income.)

Group 2: Questions 1-33

1.

A. Excluded.

B. Included.

C. Included.

D. Included.

E. Included.

F. Included.

G. Included.

H. Excluded.

I. Excluded.

J. Excluded.

K. Included.

2. He would have to report the whole, $8,000. He is basically trading the truck for his services.

3.

A. The full $300.00 would be included, he is trading his services for his hair to be styled.

B. The same for Sheila, the full $300.00. She is trading her services by doing his hair so that he could do her accounting.

4. By law they are required because it is illegal. Page 2-2 states, “ Illegal income not generally reported to the IRS are all still taxable.

5. They are taxed like capital gain rates meaning it depends on the persons AGI and taxable income.

Qual. Dividends Tax Rate for 2013

0%, 15%, 20%.

6. The interest is calculated monthly for the Series EE Bonds.

7. Went online and downloaded a PDF then wrote over it and screenshot it.

8.

A1. $500.00.

A2. $500.00.

B1. $0.

B2. $400,000.

9.

Arlen: (Included, Alimony. Excluded, Child Support. The tax treatment for alimony is all taxable income, for the child support, it is not deductible by Arlen.)

Jane: ( The Alimony Jane received from Arlen is taxable, because it is considered income. Though the Child Support is not...