Question 4 Sally is a cash basis taxpayer and a member of the Valley Barter club

Question

Question 4 Sally is a cash basis taxpayer and a member of the Valley Barter club. This year Sally provided 100 hours of sewing services to the barter club in exchange for two football playoff tickets. Which of the following is a true statement? Say need not recognize any gross income un ets she sells the football tickets Sally's exchange does not result in taxable income. Sally is taxed on the value of the football tickets even if she cannot attend the game. Saly is taxed on the value of her sewing services only if she is a professional seamstress All of these are true

Explanation / Answer

Solution: Sally is taxed on the value of football tickets even if she cannot attend the game

Explanation: As Sally has willingly provided 100 hours of sewing machine to the barter club in exchange for two football playoff tickets thus will be taxed on it's value tickets because their value will be added in his taxable income

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