Tax Consequences Of Personal Activities

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Questions Bank

Taxes and Taxing Jurisdictions
Policy Standards for a Good Tax
Taxes as Transaction Costs
Maxims of Income Tax Planning
Tax Research
Taxable Income from Business Operations
Property Acquisitions and Cost Recovery Deductions
Property Dispositions
Nontaxable Exchanges
Sole Proprietorships
The Corporate Taxpayer
The Choice of Business Entity
Jurisdictional Issues in Business Taxation
The Individual Tax Formula
Compensation and Retirement Planning
Investment and Personal Financial Planning
Tax Consequences of Personal Activities
The Tax Compliance Process

All Questions

Question 1

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True/False

Chad won a car valued at $25,000 from a game show. Because he immediately donated the car to the Red Cross, Chad can exclude $25,000 from gross income.

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Question 2

Free

True/False

Ben received a $5,000 tuition scholarship from his local community college. He can exclude the $5,000 from gross income.

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Question 3

Free

True/False

A drunk driver seriously injured Leah. The court awarded her $200,000 for her physical injuries and $300,000 as punitive damages. Leah must include $300,000 in gross income.

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Question 4

Free

True/False

Gifts are not included in the recipient's gross income.

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Question 5

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True/False

Recipients of the Nobel Peace Prize must include the prize in gross income.

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Question 6

True/False

Mia inherited $1 million from her deceased grandfather. Mia must include the inheritance in gross income.

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Question 7

True/False

Unemployment benefits are excluded from gross income.

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Question 8

True/False

Under the terms of a 2014 divorce decree, Harold transferred his one-half interest in the marital residence to his former wife Francine. Francine must include the value of the interest in gross income.

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True

False

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Question 9

True/False

For federal income tax purposes, property transfers pursuant to a divorce are nontaxable events.

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Question 10

True/False

If alimony is paid under a 2015 divorce decree, the payments are included in the recipient's gross income.

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Question 11

True/False

For purposes of the child credit, a child of divorced parents is considered a dependent of the custodial parent unless that parent agrees to allow the noncustodial parent to claim the child as a dependent.

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Question 12

True/False

Mrs Kronin received $16,200 child support payments from her former husband. These payments are excluded from Mrs Kronin's gross income.

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Question 13

True/False

Taxpayers include a maximum of 85% of Social Security benefits in gross income.

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Question 14

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Losses realized on the sale of personal use assets are deductible.

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Question 15

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Gains realized on the sale of personal use assets are generally taxable.

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Question 16

True/False

The cost of commuting to and from a place of employment is a nondeductible personal expense.

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Question 17

True/False

This year, David paid his physician $6,200 for routine examinations and lab tests and received a $3,000 reimbursement from his medical insurance company. David is allowed to deduct the $3,200 unreimbursed medical expense as an above-the-line deduction.

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Question 18

True/False

For federal income tax purposes, a taxpayer may deduct state and federal employment taxes ($10,000 maximum) as itemized deductions.

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Question 19

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For federal income tax purposes, a taxpayer may elect to deduct state and local sales taxes ($10,000 maximum) as itemized deductions.

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Question 20

True/False

Congress provides an indirect subsidy to charities by allowing a deduction for charitable contributions.

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