elows taxpayers to deduct lots of items, such as 11. Abi receives a wri st watch
ID: 2336107 • Letter: E
Question
elows taxpayers to deduct lots of items, such as 11. Abi receives a wri st watch v he employer has a tradition of giving awards to some retiring employees, but has no alued at $500 from her employer during her retirement dinner for her long qualified plan. I. $400 is excludable from Abi's Gross Income iax II. The $500 is excludable even if her employer only gives awards to its top executives a. Only statement I is correct. b. Only statement II is correct. c. Both statements are correct. d. Neither statement is correct. fin 12. To keep the employees on the premises in case an emergency arises, the meals to its employees in a room adjacent to their restaurant. Since the convenience to the employer and on their premises, the value of the meals is ex the employees. meals are provided as a cluded in the income of a. True b. False as in an accident which was the other driver's fault. Hank received $150,000 for pain and suffering, emotional distress, and lost wages. Hank is required to include the settlement in gross income. a. True b. False 14. Which of the following statements is TRUE? a. The income from illegal business operations does not have to be reported b. State and local bond interest is excluded from income for federal purposes c. Medical insurance paid by your employer is included in gross income d. Gifts are taxable to the recipient 15. During the current year, Eleanor receives land valued at $30,000 from the estate of her grandfather Her grandfather's basis in the land was $8,000. Eleanor sells the land for $34,000 late in the year Eleanor's gross income is: a. b. $4,000 c. $8,000 d. $16,000 e. $26,000 used the dividends to pay college expenses. The cost of L.aurie's tuition, fees, and books is Laurie's gross income from this event is: 16. On her 18th birthday, Laurie's great aunt gave her $8,000 of dividends on stock she ow b. $2,000 c. $6,000 d. $8,000Explanation / Answer
11.
D Netiher statement is correct. Any gift other than one qualified under De Minimis is taxable.
12.
A True. Under section 119 A, the employer must furnish the meals on the employer's business premises as excludable from employee's gross income.
13.
B False. Personal injury settlements are not considereed income and are not taxable.
14.
B State and local bond interest is excluded from income for federal purposes.
As per 26 US code 103, Gross Income does not include interest on any state or local bond.
15.
B 4000
Gross Income = 34000-30000
16.
A. 0
Dividend is taxable in the hands of the shareholder.
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