Jena is a full-time student atState University and is claimed by her parents as
ID: 2458110 • Letter: J
Question
Jena is a full-time student atState University and is claimed by her parents as adependent. Her only source of income is a $6,000 scholarship($400 for books, $3,000 tuition, $200 athletic fee, and $2,400 roomand board). Jena’s gross income for the yearis:
$0.
$400.
$2,600.
$3,000.
The taxpayer is a Ph.D. student inaccounting at State University. The student is paid $1,000per month for teaching two classes.
The $1,000 is excludible if allPh.D. students are required to teach.
The $1,000 is excludible because itis a gift.
The $1,000 is considered ascholarship and, therefore, is excluded.
Only $500 is included inincome.
Legal fees incurred in connectionwith a criminal defense are deductible if the crime is associatedwith a trade or business.
Jacques, who is not a U.S. citizen,makes a contribution to the campaign of a candidate forgovernor. A contribution by a noncitizen is illegal understate law. Cassie, a U.S. citizen, makes a contribution tothe same campaign fund. The contribution by Cassie isdeductible, while the contribution by Jacques is not.
If a vacation home is primarilyrental, a deduction for all of the rental expenses isallowed.
Goodwill must be capitalized andcannot be amortized.
$0.
Explanation / Answer
Jena is a full-time student atState University and is claimed by her parents as adependent. Her only source of income is a $6,000 scholarship($400 for books, $3,000 tuition, $200 athletic fee, and $2,400 roomand board). Jena’s gross income for the yearis:
Jacques, who is not a U.S. citizen,makes a contribution to the campaign of a candidate forgovernor. A contribution by a noncitizen is illegal understate law. Cassie, a U.S. citizen, makes a contribution tothe same campaign fund. The contribution by Cassie isdeductible, while the contribution by Jacques is not.
If a vacation home is primarilyrental, a deduction for all of the rental expenses isallowed.
Goodwill must be capitalized andcannot be amortized.
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