ACC 3400 Test 1
Derek, a single taxpayer, has AGI of $55,200 which includes $5,000 of qualified dividends. Derek does not itemize deductions. What is his 2019 federal income tax?
4,910
What are the correct monthly rates for calculating failure to file and failure to pay penalties?
Failture to file 5% Failure to pay 0.5%
An electrician completes a rewiring job and is paid $1,000 by the customer in November. The customer has a small fire in his house and sues the electrician for the repayment of the $1,000 fee plus damages in December. The electrician reaches a settlement with the customer in the following February and refunds the $1,000 fee. How should the electrician treat these events when he files his tax return in April?
The income will be reported for the year of receipt, and a tax deduction will be claimed on the tax return for the year of repayment.
Which of the following item(s) must be included in the income of the respective employees?
The state of California highway patrol organization provides its officers with a daily meal allowance to compensate them for meals eaten at any location while they are on duty.
Britney is beneficiary of a $150,000 insurance policy on her father's life. Upon his death, she may elect to receive the proceeds in five yearly installments of $32,000 or may take the $150,000 lump sum. She elects to take the lump sum payment. What are the tax consequences in year one?
There is no taxable income.
Tom and Alice were married on December 31 of last year. What is their filing status for last year?
They file as married filing jointly or married filing separately.
Dave, age 59 and divorced, is the sole support of his mother age 83, who is a resident of a local nursing home for the entire year. Dave's mother had no income for the year. Dave's filing status is
head of household
Edward, a widower whose wife died in 2016, maintains a household for himself and his 10-year-old daughter. Edward's most favorable filing status for 2019 is
head of household
Jacob, who is single, paid educational expenses of $16,000 in 2019. He redeemed Series EE bonds and received principal of $8,000 and interest of $3,000. Jacob has other adjusted gross income of $85,100. The $3,000 exclusion must be reduced by
1,400
All of the following are executive (administrative) sources of tax law except
Internal Revenue Code
All of the following items are deductions for adjusted gross income except
unreimbursed employee business expenses.
Peyton has adjusted gross income of $2,000,000 on his 2018 tax return, filed April 15, 2019, the due date. He accidentally failed to include $200,000 that he received for a television advertisement. How long does the IRS have to audit Peyton's federal tax return?
until April 17, 2022
Which of the following is not considered support for the dependent support test?
value of services rendered by the taxpayer for the dependent
Which one of the following fringe benefits allows for discrimination between highly compensated employees and other employees to be present?
working condition
Municipal bond interest is taxable.
year-end bonus check
If an individual with a taxable income of $15,000 has a long-term capital gain, it is taxed at
0%
Kole earns $140,000 in 2019 in his job as a sales manager. What is his FICA tax?
10,270
Juanita's mother lives with her. Juanita purchased clothing for her mother costing $1,000 and provided her with a room that Juanita estimates she could have rented for $4,000. Juanita spent $5,000 on groceries she shared with her mother. Juanita also paid $700 for her mother's health insurance coverage. How much of these costs is considered support?
8,200
Charlie is claimed as a dependent by his parents in 2019. He received $8,000 during the year from a part-time acting job, which was his only income. What is his standard deduction?
8,350
Bret carries a $200,000 insurance policy on his life and has paid premiums of $10,000 over the years. Dividends on the policy have totaled $8,500. Each year Bret has left the dividends with the insurance company. In the current year, the insurance company credited $800 of interest on the accumulated dividends to Bret's account. In addition, $600 of dividends was added by the insurance company. In the current year, Bret must report income of
800
Lori had the following income and losses during the current year: Wages$22,000 Share of partnership income18,000 Unemployment compensation12,000 Gambling winnings2,000 Gambling losses( 5,000) Prize won from a charity raffle30,000 What is Lori's adjusted gross income?
84,000
Ms. Walter, age 70, is thinking about going back to work part-time. She knows that the wages may affect the taxability of her Social Security benefits. What is the maximum percentage of Social Security benefits that could become taxable?
85%
David, age 62, retires and receives $1,000 per month annuity from his employer's qualified pension plan. David made $65,000 of after-tax contributions to the plan prior to his retirement. Under the simplified method, David's number of anticipated payments is 260. What is the amount includible in income in the first year of withdrawals assuming 12 monthly payments?
9,000
Chad and Jaqueline are married and have AGI of $150,000. In 2019 they adopted a child, while taking advantage of their employer's written adoption assistance program. The adoption cost $9,500, all of which was paid by the employer in accordance with the adoption plan. How much of the employer-paid adoption costs may be excluded from their income?
9,500
Tom and Heidi, husband and wife, file separate returns. Tom and Heidi live in a common law state. Tom's salary is $82,000 and Heidi's salary is $80,000. Heidi receives dividend income of $7,000 from stock inherited from her parents. Tom receives interest income of $5,000 from bonds purchased with his salary after marriage. Tom and Heidi receive $12,000 dividend income from stock they purchased jointly. Tom's income would be
93,000
Sarah, who is single, maintains a home in which she, her 15-year-old brother, and her 21-year-old niece live. Sarah provides the majority of the support for her brother, her niece, and her cousin, age 18, who is enrolled full-time at the university and lives in an apartment. While the niece and cousin have no income, her brother has a part-time job and earns $4,500 per year. How many dependents may Sarah claim?
Anita can claim her daughter, but not her son, as a dependent.
Alan files his 2018 tax return on April 1, 2019, shortly before the April 15 due date. His return contains no misstatements or omissions of income. The statute of limitations for changes to the return expires
April 15, 2022
Latashia reports $100,000 of gross income on her 2018 tax return, filed on the April 15, 2019 due date. She omits $30,000 of income, but the error was not fraudulent. When does the statute of limitations for examining her tax return expire?
April 15, 2025
Blaine Greer lives alone. His support comes from the following sources: Buddy (his son)$2,600 Ken (his brother)4,200 Martha (his daughter)2,300 Natalie (a friend)1,000 Total support$10,100 Assuming a multiple support declaration exists, which of the individuals may claim Blaine as a dependent?
Buddy, Ken, or Martha
All of the following are classified as flow-through entities for tax purposes except
C Corporations
Which of the following taxes is regressive?
Federal Insurance Contributions Act (FICA)
The Senate equivalent of the House Ways and Means Committee is the Senate
Finance Committee
Fireball Corporation is an S corporation. Leyla owns all of the stock. During the current year, Fireball earned taxable income of $500,000 and paid a $300,000 distribution to Leyla. Which of the following statements is correct?
Fireball's income will flow through to Leyla's tax return, and she will pay the taxes on the $500,000 of corporate income.
Under the terms of their divorce agreement executed in August of this year, Clint transferred Beta, Inc. stock to his former wife, Rosa, as a property settlement. At the time of the transfer, the stock had a basis to Clint of $55,000 and a fair market value of $68,000. Rosa subsequently sold the stock for $75,000. What is the tax consequence of first the stock transfer and then the stock sale to Rosa?
Rosa's income from stock transfer $0 Rosa's income from stock sales 20,000 capital gain
Which of the following taxes is proportional?
Sales tax
Ava reports income from a sole proprietorship, earning interest on bank accounts and gains on sales of stock. In addition to the Form 1040, she will need to file
Schedule 1
Sally divorced her husband three years ago and has not remarried. Since the divorce she has maintained her home in which she and her now sixteen-year-old daughter reside. The daughter is a qualified child. Sally signed the daughter's dependent status over to her ex-spouse by filing the appropriate IRS form. What is Sally's filing status for the current year?
head of household
All of the following items are deductions for adjusted gross income except
state and local income taxes.
Ben, age 67, and Karla, age 58, have two children who live with them and for whom they provide total support. Their daughter is 21 years old, blind, is not a full-time student and has no income. Her twin brother is 21 years old, has good sight, is a full-time student and has income of $4,800. Which of the following statements is correctregarding Ben and Karla's ability to claim the twins as dependents?
The couple can claim both twins as dependents.
The oldest age at which the "Kiddie Tax" could apply to a dependent child is
23
Norah, who gives music lessons, is a calendar-year taxpayer using the cash-basis method of accounting. On October 1 of this year, she received $1,200 for a one-year contract beginning on that date to provide 10 lessons. She gave 6 lessons this year. How much should Norah include in income this year?
$1,200
Silver Inc. is an S corporation. This year it earned $60,000 of taxable income and paid a $10,000 distribution to Daisy, its sole shareholder. Daisy has a marginal tax rate of 24%. Due to the corporation's results and the distribution paid, the IRS will receive total taxes of
$11,520
Artco Inc. is a C corporation. This year it earned $50,000 of taxable income and paid a $10,000 distribution (dividend) to Lily, its sole shareholder. Lily has a marginal tax rate of 24%. Due to the corporation's results and the distribution paid, the IRS will receive total taxes of
$12,000
Elise, age 20, is a full-time college student with earned income from wages of $4,400 and interest income of $500. Elise's parents provide more than half of her support. Elise's 2019 taxable income is
$150
Rick chose the following fringe benefits under his employer's cafeteria plan. Which of his chosen benefits will be taxable?
$150 cash per pay period
Sarah contributes $25,000 to a church. Sarah's marginal tax rate is 35% while her average tax rate is 25%. After considering her tax savings, Sarah's contribution costs
$16,250.
Mae Li is beneficiary of a $70,000 insurance policy on her father's life. Upon his death, she elects to receive the proceeds in installments from the insurance company that carries the policy. She will receive $16,000 per year for five years. What are the tax consequences each year?
$2,000 of the $16,000 payment is taxable each year.
A corporation has revenue of $350,000 and deductible business expenses of $240,000. What is the federal income tax, before credits?
$23,100
A small corporation selling goods would prefer to use the cash method to simplify its accounting records. It will be able to continue using the cash method as long as average gross receipts for its three prior years do not exceed
$26 million
Michelle, age 20, is a full-time college student with earned income from wages of $5,200 and interest income of $700. Michelle's parents provide more than half of Michelle's support. Michelle's 2019 taxable income is
$350
Which of the following benefits provided by an employer is subject to withholding and must be reported on the employee's W-2?
$400 cash award for long-term service, awarded at a special employee awards event
Miranda is not a key employee of AB Corporation. AB provides Miranda with group term life insurance coverage of $140,000. The premiums attributable to the excess coverage are $1,300. The uniform one-month group-term premium is one dollar per $1,000 of coverage. How much must Miranda include in income?
1,080
Lewis, who is single, is claimed as a dependent by his parents. He received $2,000 during the year in dividends, which was his only income. What is his standard deduction for 2019?
1,100
Amanda has two dependent children, ages 10 and 12. She earned $30,000 from her job, and her income tax before credits is $1,200. How much of her child credit is refundable?
1,400
Frasier and Marcella, husband and wife, file separate returns. Frasier and Marcella live in a community property state that considers separate property income to be separate. Frasier's salary is $42,000 and Marcella's salary is $46,000. Marcella receives dividend income of $4,000 from stock inherited from her parents. Frasier receives interest income of $1,000 from bonds purchased with his salary after marriage. Frasier and Marcella receive $3,200 dividend income from stock they purchased jointly. Marcella's income would be
$50,100.
Norah's Music Lessons Inc. is a calendar-year taxpayer using the accrual method of accounting. On October 1 of this year, the corporation received $1,200 for a one-year contract beginning on that date to provide 10 lessons. The company provided 6 lessons this year under the contract. How much should the corporation include in income this year with respect to this contract?
$720
Hoyt rented office space two years ago to Harris, receiving the first and last months' rent plus a security deposit of $1,000. In early January of this year, Harris moves and Hoyt refunds $250 of the deposit and keeps the remainder to cover $500 which is spent for repairs to the office space and one week of unpaid rent that amounts to $250. How would this information be reflected on Hoyt's tax return this year?
$750 income and $500 deduction
Todd and Hillary, husband and wife, file separate returns. Todd and Hillary live in a community property state that considers separate property income to be community income. Todd's salary is $82,000 and Hillary's salary is $80,000. Hillary receives dividend income of $7,000 from stock inherited from her parents. Todd receives interest income of $5,000 from bonds purchased with his salary after marriage. Todd and Hillary receive $10,000 dividend income from stock they purchased jointly. Todd's income would be
$92,000.
An electronics store sold a home theater system to an employee for $300, even though the retail price was $500. The gross profit percentage is 40%. Such discounts are available to all employees. How much income should be recognized by the employee from these transactions?
0
Connor owes $4 million and has assets of only $1 million. He declares and files personal and business bankruptcy and his creditors approve a payment plan of $.25 per dollar. Connor has a net operating loss carryover of $2 million. The remaining 75 percent of his debt will be canceled. Connor must recognize income of
0
During 2018, Mark's employer withheld $2,000 from his wages for state income tax. Mark claimed the $2,000 as an itemized deduction on his 2018 federal income tax return. His total itemized deductions for 2018 were $15,000 (the 2018 standard deduction was $12,000). Mark's taxable income for 2018 was a negative $25,000 due to substantial business losses. Mark received the $2,000 as a refund from the state during 2019. What amount must Mark include in income in 2019?
0
Greg is the owner and beneficiary of a $100,000 policy on the life of his mother. Greg gives the policy to his brother, Don. Don subsequently pays premiums of $40,000. Upon his mother's death, how much of the insurance proceeds must Don include in income?
0
In September of 2019, Michelle sold shares of qualified small business stock for $1,000,000 that had a basis of $200,000. She had held the stock for 17 months. Forty-five days after the sale she purchased other qualified small business stock for $1,100,000. How much of the gain will she recognize?
0
Julia owns 1,000 shares of Orange Corporation. This year, Orange declared a 10% stock dividend. There was no option for shareholders to receive cash. When Julia received 100 shares of Orange stock, it had a fair market value of $50 a share. How much income does Julia have from the dividend?
0
Julia suffered a severe stroke and has been admitted to a private hospital where she is expected to remain for the rest of her life. She is certified by a licensed health care practitioner as being a "chronically ill individual." Her hospital expenses amount to $350 per day. She will receive $340 per day from a $500,000 life insurance policy as an accelerated death benefit. In 2019, she was in the hospital for 10 days and received $3,400. How much of this amount is taxable?
0
Julia, age 57, purchases an annuity for $33,600. Julia will receive $400 per month for the rest of her life. The expected return multiple is 20.0. At age 88, the amount that Julia may exclude from income is
0
Michael is an employee of StayHere Hotels, Inc. in Washington, DC. On his vacation, Michael travels to San Francisco and stays at a StayHere Hotel for six nights free of charge. The regular rate for a hotel room at StayHere in San Francisco is $300 a night. His ability to stay in the hotel without charge is based on the availability of empty rooms. How much income must Michael report due to the use of the San Francisco hotel room?
0
Nelda suffered a serious stroke and was admitted to a nursing home for 140 days. Nursing home charges, including physician fees and other related expenses were $33,000. Under Nelda's long-term care insurance contract, she received reimbursements of $36,000. How much of the $36,000 reimbursement must be included in Nelda's gross income in 2019?
0
Natasha is a single taxpayer with $100,000 of taxable income. Included in the taxable income is distributions of earnings this year as follows: CE Corp., a C corporation$1,000 SE Corp., an S corporation$2,000 Paris Corp., a foreign corporation $3,000 How much of the $6,000 distribution will be taxed at the 15% tax rate?
1,000
The child credit is for taxpayers with dependent children under the age of
17
Jing, who is single, paid educational expenses of $16,000 in 2019. He redeemed Series EE bonds and received principal of $8,000 and interest of $3,000. Jing has other adjusted gross income of $85,100. With respect to the $3,000 of bond interest, Jing must include in taxable income
1,600
Richard is a key employee of Winn Corporation. The corporation provides Richard with $120,000 of group-term life insurance coverage. Only company executives receive life insurance coverage. The premium attributable to the coverage is $1,600. The uniform one-month group-term premium is one dollar per $1,000 of coverage. How much must Richard include in income due to the policy?
1,600
In December 2019, Max, a cash-basis taxpayer, rents an apartment to Kadeem. Max receives both the first and last months' rent totaling $1,800 plus a security deposit of $400. The amount of income reported by Max as taxable in 2019 is
1,800
Charlotte pays $8,000 in tax deductible property taxes. Charlotte's marginal tax rate is 24%, effective tax rate is 20% and average rate is 22%. Charlotte's tax savings from paying the property tax is
1,920
David's father is retired and receives $14,000 per year in Social Security benefits. David's father saves $4,000 of the benefits and spends the remaining $10,000 for his support. How much support must David provide for his father to meet the dependent support requirement?
10,001
In 2019, an estate is not taxable unless the sum of the taxable estate and taxable gifts made after 1976 exceeds
11,400,000
Jillian, a single individual, earns $230,000 in 2019 through her job as an accounting manager. What is her FICA tax?
11,845
Melanie, a U.S. citizen living in Paris, France, for the last three years, earns a salary of $125,000 in 2019. Melanie's housing costs are $24,000 per year, which is reasonable. How much can Melanie exclude from income?
112,956
John is injured and receives $16,000 of income from a disability policy. John's employer paid 75% of the disability policy premiums and John paid the remainder. In addition, John's employer has paid all the $3,000 of premiums on a health policy that paid John's doctor bills of $10,000. How much of the benefits must John include in income?
12,000
Deborah is claimed as a dependent by her parents. She had a part-time acting job during 2019 and earned $13,000 during the year, which was her only income. What is her standard deduction?
12,200
Jose dies in the current year and has a gross estate valued at $13,000,000 in 2019. Over the past ten years, Jose had made taxable gifts of $400,000. The estate incurs funeral and administrative expenses of $100,000 and also pays off Jose's debts which amount to $300,000. Jose bequeaths $500,000 to his wife. What is the amount of Jose's tax base, the amount on which the estate tax is computed?
12,500,000
Charlie makes the following gifts in the current year: $40,000 to his spouse, $30,000 to his church, $18,000 to his nephew, and $25,000 to a friend. Assuming Charlie does not elect gift splitting with his wife, his taxable gifts in the current year will be
13,000
On June 1, 2019, Ellen turned 65. Ellen has been a widow for five years and has no dependents. Her standard deduction is
13,850
Taquin, age 67 and single, paid home mortgage interest of $5,000, charitable contributions of $5,000 and property taxes of $4,000 in 2019. He has no dependents. Taquin will claim a deduction from AGI of
14,000
Sarah receives a $15,000 scholarship from City University. The university specifies that $8,000 is for tuition, books, supplies, and equipment for classes. The other $7,000 is for room and board. Sarah works ten hours per week as a grader, for which she is paid $7,500 for the year. Of the total amount received, Sarah must include the following amount in gross income
14,500
Cameron is the owner and beneficiary of a $300,000 policy on the life of his mother. Cameron sells the policy to his brother, Parker, for $100,000. Parker subsequently pays premiums of $55,000. Upon his mother's death, how much of the insurance proceeds must Parker include in income?
145,000
If a single taxpayer with a marginal tax rate of 24% has a long-term capital gain, it is taxed at
15%
Lindsay Corporation made the following payments to the family of Luke Marshall, an employee who died during the year. $5,000 for Luke's final paycheck that he failed to collect $10,000 for accrued vacation days as required by the employment contract $25,000 in admiration of Luke's outstanding service to the community What is the total amount that Luke's family must include in income?
15,000
Eric dies in the current year and has a gross estate valued at $16,500,000. The estate incurs funeral and administrative expenses of $100,000 and also pays off Eric's debts which amount to $250,000. Eric bequeaths $600,000 to his wife. Eric made no taxable transfers during his life. Eric's taxable estate will be
15,550,000
Homer Corporation's office building was destroyed by fire. Homer collected insurance of $250,000, which equaled the building's basis, and $150,000 for profits lost during the time the company was rebuilding the office building. What is the amount taxable this year?
150,000
This year, Jason sold some qualified small business stock that he acquired in 2008. His basis in the stock was $100,000 and he sold it for $400,000, resulting in a $300,000 gain. How much of Jason's gain is taxable?
150,000
CT Computer Corporation, an accrual-basis taxpayer, sells service contracts on the computers it sells. At the beginning of January of this year, CT Corporation sold contracts with service to begin immediately: One for three months . $200 One for 20 months 800 One for 48 months 4,000 The amount of income CT Corporation must report for this year is
1680
Alex is a calendar-year sole proprietor. He began business on December 1, this year. He uses the accrual method of accounting. Alex had the following collections in December: • Collected $7,000 in December, from clients who paid cash for services to be performed next year. • Collected $5,000 in December, for services performed during December; deposited in an operating account on December 31, this year. • Collected $12,000 in December; on accounts receivable for services performed in December; deposited in operating account on January 2, next year. What is the amount Alex must include in his income for December?
17,000
Briana, who is single, has taxable income for 2019 of $90,000, resulting in a total tax of $15,775. Her total economic income is $100,000. Briana's average tax rate and effective tax rate are, respectively,
17.53 an 15.78
Lily had the following income and losses during the current year: Salary$75,000 Prize from quiz show25,000 Unemployment compensation8,000 Embezzled funds30,000 Share of partnership income35,000 What is Lily's adjusted gross income?
173,000
Gwen's marginal tax bracket is 24%. Under the terms of a divorce decree settled in 2018, Gwen pays alimony of $24,000 per year. Gwen's after tax cost for the $24,000 payment is
18,240
Julia provides more than 50 percent of the support for three individuals: Theresa, an unrelated child who lives with Julia all year long; Margaret, Julia's cousin, who lives in another city; and Emma, Julia's daughter, who lives in her own home. Each of the potential dependents earned less than $4,200. How many dependents can Julia claim?
2
Sarah, who is single, maintains a home in which she, her 15-year-old brother, and her 21-year-old niece live. Sarah provides the majority of the support for her brother, her niece, and her cousin, age 18, who is enrolled full-time at the university and lives in an apartment. While the niece and cousin have no income, her brother has a part-time job and earns $4,500 per year. How many dependents may Sarah claim?
2
Natasha, age 58, purchases an annuity for $40,000. Natasha will receive $400 per month for the rest of her life. The expected return multiple is 20.0. At age 65, the amount that Natasha may exclude from income is
2,000
Fatima's employer funds child care for all employees' children. She pays nothing for this service. The cost of Fatima's child care is $7,200 a year. How much of the child care benefits are taxable to Fatima?
2,200
In December of this year, Jake and Stockard, a married couple, redeemed qualified Series EE U.S. Savings Bonds. The proceeds were used to help pay for their daughter's college tuition. Jake and Stockard received proceeds of $8,000 representing principal of $5,000 and interest of $3,000. The qualified higher educational expenses they paid this year totaled $6,000. Their AGI is below the threshold for phase-out of the exclusion. What is the amount of interest income Jake and Stockard can exclude from their income this year?
2,250
In addition to Social Security benefits of $8,000, Mr. and Mrs. Wells have adjusted gross income of $32,000 and tax-exempt interest of $1,000. They will file a joint return. The taxable portion of their Social Security benefits will be
2,500
Rose and Steve are a married couple with two qualifying children. Lily is a 15-year-old high school student, and Sam is a 21-year-old college student. The couple reports AGI of $165,000. The couple is entitled to child and dependent credits of
2,500
In 2019, Richard, a single taxpayer, has adjusted gross income of $40,200. His AGI includes $4,000 of qualified dividends. Richard does not itemize deductions. What is his 2019 federal income tax?
2,686
If a single taxpayer with a marginal tax rate of 37% has a long-term capital gain, it is taxed at
20%
Signal Corporation is an S corporation owned equally by Serena and three other shareholders. The corporation reported $900,000 of business receipts, $500,000 of business deductions and $40,000 of dividend income. On Serena's return, she will be entitled to a deduction for qualified business income of
20,000
Martha is self-employed in 2019. Her self employment income is $140,000. What is her self-employment tax?
20,540
Exter Company is experiencing financial difficulties. It has assets worth $2 million, but owes liabilities of $2.1 million. It has a longstanding relationship with the bank. The bank has agreed to forgive $300,000 of debt principal. Because of this debt forgiveness, Exter will recognize income of
200,000
Paul makes the following property transfers in the current year:• $22,000 cash to his wife• $34,000 cash to a qualified charity• $220,000 house to his son• $3,000 computer to an unrelated friendThe total of Paul's taxable gifts, assuming he does not elect gift splitting with his spouse, subject to the unified transfer tax is
205,000
Tyler has rented a house from Camarah since last year. The rent is usually $1,200 per month, but Camarah reduced the monthly rent down to $200 for all twelve months this year in exchange for Tyler putting in an inground pool in the backyard. The improvement has a fair market value of $20,000. How much total rental income must Camarah report this year?
22,400
Husband and wife, who live in a common law state, are eligible to file a joint return for 2019, but elect to file separately. Wife has adjusted gross income of $25,000 and has $2,200 of expenditures which qualify as itemized deductions. Husband deducts itemized deductions of $14,200. What is the taxable income for the wife?
22,800
Gabby is planning a divorce, the terms of which will be settled in 2019. Under the expected terms of the divorce decree, she will pay alimony of $24,000 per year. Gabby's expected marginal tax bracket for 2019 is 24%. Gabby will have an after tax cost for the $24,000 payment of
24,000
In 2019, Brett and Lashana (both 50 years old) file a joint tax return claiming as a dependent their son who is blind. Their standard deduction is
24,400
Reva is a single taxpayer with a taxable pension of $24,000, tax-exempt interest of $8,000, and Social Security benefits of $10,000. What is the amount of her taxable Social Security benefits?
25,500
AB Partnership earns $500,000 in the current year. Partners A and B are equal partners who do not receive any distributions during the year. How much income does partner A report from the partnership?
250,000
Amanda, who lost her modeling job, sued her employer for age discrimination. She was awarded $75,000 in lost wages, $25,000 for emotional distress, and $150,000 punitive damages. The amount taxable is
250,000
In 2019, the standard deduction for a married taxpayer filing a joint return and who is 67 years old with a spouse who is 65 years old is
27,000
Shaquille buys new cars for five of his friends. Each car cost $70,000. What is the amount of Shaquille's taxable gifts?
275,000
John supports Kevin, his cousin, who lived with him throughout 2019. John also supports three other individuals who do not live with him: Donna, who is John's mother Melissa, who John's stepsister Morris, who is John's cousin Assume that Donna, Melissa, Morris, and Kevin each earn less than $4,200. How many dependents can John claim?
3
Carla redeemed EE bonds which qualify for the educational exclusion. The redemption consisted of $14,000 principal and $6,000 interest. The net qualifying educational expenses are $10,000. Her AGI is below the threshold for phase-out of the exclusion. The taxable interest is
3,000
Nate and Nikki have two dependent children ages 12 and 15. Their modified AGI is $410,000. What is the amount of the child credit to which they are entitled?
3,500
Tercot Partnership reported $1,000,000 of business receipts, $700,000 of business deductions, and $100,000 of interest income. Terry is a 50% partner in Tercot Partnership. On Terry's return, she will be entitled to a deduction for qualified business income of
30,000
In September of 2019, Michelle sold shares of qualified small business stock for $1,000,000 that had a basis of $200,000. She had held the stock for 17 months. Forty-five days after the sale she purchased other qualified small business stock for $1,100,000. What is the basis in the new stock she purchased?
300,000
Rocky and Charlie form RC Partnership as equal partners. Rocky contributes $100,000 into RC while Charlie contributes real estate with a cost and fair market value of $100,000. During the current year, RC earned net income of $600,000. The partnership distributes $200,000 to each partner. The amount that Rocky should report on his individual tax return is
300,000
Brad suffers from congestive heart failure and has been admitted to a nursing home where he is expected to spend the remainder of his life. His doctor has certified him as chronically ill. In 2019, Brad receives $320 per day from his life insurance policy for 100 days ($32,000) as accelerated death benefits. Brad's nursing home care costs $300 per day ($30,000 for the 100 days of care). Brad will be allowed to exclude
32,000
Bob, an employee of Modern Corp., receives a fringe benefit (in lieu of a salary increase) of $1,000. Bob is in a 32% tax bracket. The fringe benefit is nontaxable to Bob. If he had instead paid for the benefit out of his own money, the cost would not be deductible. Bob's after-tax savings from receiving the tax-free benefit is
320
Tim earns a salary of $40,000. This year, Tim's employer establishes a cafeteria plan under which Tim signed a salary reduction of $2,500 for which $1,500 is to cover his health insurance premiums and $1,000 is transferred to a flexible spending account to reimburse medical expenses. During the year, he is reimbursed $900 for medical expenses. What is the total taxable to Tim this year?
37,500
Steven and Susie Tyler have three children ages 13, 15, and 19. The 19-year-old is in the military and not a dependent. Their modified AGI is $108,000. What is the amount of the child credit to which they are entitled?
4,000
Thomas purchased an annuity for $20,000 that will pay him $500 per month for ten years. What amount should Thomas include in his income each year?
4,000
Sharisma suffered a serious stroke and was admitted to a nursing home for 140 days. Nursing home charges, including physician fees and other related expenses were $63,000. Under Sharisma's long-term care insurance contract, she received reimbursements of $56,000. How much of the $56,000 reimbursement must be included in Sharisma's gross income in 2019?
4,200
Helen, who is single, is considering purchasing a residence that will provide an $18,000 tax deduction for property taxes and mortgage interest. If her marginal tax rate is 24% and her effective tax rate is 20%, what is the amount of Helen's tax savings from purchasing the residence?
4,320
Mr. and Mrs. Tsayong are both over 66 years of age and are filing a joint return. Their income this year consisted of the following: Taxable interest income$10,000 Taxable pension16,000 Total Social Security benefits20,000 Tax-exempt interest5,000 They did not have any adjustments to income. What amount of Mr. and Mrs. Tsayong's Social Security benefits is taxable this year?
4,500
Ahmad's employer pays $10,000 in tuition this year for Ahmad to attend a graduate business program. How much of the employer-provided tuition is taxable to Ahmad?
4,750
Linda was injured in an automobile accident caused by another driver. Her son, Matthew, was in the automobile but not physically injured. The other driver's insurance company was required by a court to pay Linda $75,000 to cover medical bills relating to her injuries, $30,000 to compensate her for emotional distress attributable to the injuries and $40,000 of punitive damages. Matthew was paid $15,000 to compensate him for emotional distress attributable to his witnessing his mother's injuries. What is the amount taxable to Linda?
40,000
Bridget owns 200 shares of common stock of Jones Corporation. During the current year, Jones gives its shareholders the choice of receiving cash of $2 per share or one additional share of Jones common stock for each 5 shares of stock owned. The stock has a fair market value of $10 per share. Bridget chooses to take the additional shares of stock. How much income does Bridget have from the stock dividend?
400
Jonathon, age 50 and in good health, withdrew $6,000 from his pension plan during the current year. The withdrawal was not eligible for any exception to the 10% penalty. Jonathon had made $40,000 of after-tax contributions to the plan while his employer had contributed $80,000. In addition to relevant income taxes, how much penalty must Jonathon pay?
400
Carolyn, who earns $400,000, is required to pay John, her ex-husband, $200,000 as part of the property settlement as a result of their divorce agreement which was executed in 2019. In turn, John transfers stock worth $50,000 to Carolyn. What is the amount of Carolyn's adjusted gross income in 2019?
400,000
Annisa, who is 28 and single, has adjusted gross income of $55,000, itemized deductions of $5,000 and a lifetime learning credit of $1,000. In 2019, Annisa will have taxable income of
42,800
Kate files her tax return 36 days after the due date. When she files the return, she sends a check for $2,000 which is the balance of the tax owed by her. Kate's penalty for failure to file a return will be
5% per month (or factor thereof) up to a maximum of 25%.
CT Computer Corporation, a cash-basis taxpayer, sells service contracts on the computers it sells. At the beginning of January of this year, CT Corporation sold contracts with service to begin immediately: One for three months $200 One for 20 months 800 One for 48 months 4,000 The amount of income CT Corporation must report for this year is
5,000
Ryan and Edith file a joint return showing $420,000 of AGI. They have three dependent children ages 7, 9, and 13. What is the amount of their child credit?
5,000
Tarik, a single taxpayer, has AGI of $55,000 which includes $1,000 of qualified dividends. Tarik does not of itemize deductions. What is his 2019 federal income tax?
5,205
Cheryl is claimed as a dependent by her parents. She had a part-time job during 2019 and earned $4,900 during the year, in addition to $600 of interest income. What is her standard deduction?
5,250
Elisa sued her former employer for discrimination. She was awarded $200,000 for lost wages, $30,000 for medical expenses related to emotional distress resulting from the discrimination, and $300,000 in punitive damages. The amount taxable is
500,000
Frank and Marion, husband and wife, file separate returns. Frank and Marion live in a common law state. Frank's salary is $42,000 and Marion's salary is $46,000. Marion receives dividend income of $4,000 from stock inherited from her parents. Frank receives interest income of $1,000 from bonds purchased with his salary after marriage. Frank and Marion receive $3,200 dividend income from stock they purchased jointly. Marion's income would be
51,600
Healthwise Ambulance requires its employees to be on 24-hour call and consequently gives them $800 per month housing allowance and a $200 per month food allowance. Ron, an employee of Healthwise, receives a salary of $40,000 per year (this does not include the allowances). Ron will be taxed each year on
52,000
Tonya's employer pays the full premium on a disability income policy from an insurance company on behalf of all employees. After a skiing accident, Tonya was out of work for three months and collected $2,000 per month ($6,000 total) of disability benefits from this policy. In addition, Tonya received another $1,000 per month ($3,000 total) from a disability policy she had purchased herself. Tonya had paid a total of $1,300 in premiums on her policy. How much of the $9,000 total received is taxable?
6,000
Mark purchased 2,000 shares of Darcy Corporation for $13,200. This year, Darcy declared a 10% nontaxable stock dividend, and Mark received 200 shares. After the dividend Mark's per share basis will be
6.00
During 2018, Christiana's employer withheld $1,500 from her wages for state income taxes. She claimed the $1,500 as an itemized deduction on her 2018 federal income tax return which included $14,000 of itemized deductions (the 2018 standard deduction was $12,000). Christiana is single. On her 2018 state income tax return, her state income tax was $900. As a result, Christiana received a $600 refund in 2019. What amount must Christiana include in income in 2019?
600
A taxpayer had the following income and losses in the current year: Salary$55,000 Sold AT&T stock at a loss( 5,000) Lottery prize4,500 Gambling winnings8,000 Gambling losses( 5,000) What is the taxpayer's adjusted gross income?
64,500
Carl filed his tax return, properly claiming the head of household filing status. Carl's employer paid or provided the following to Carl: Wages$65,000 Fair market value of qualified dependent care services4,000 Premiums for $50,000 qualified group term life insurance 500 Medical insurance premiums600 How much of this income should Carl report (assume benefits are provided on a nondiscriminatory basis)?
65,000
Ms. Marple's books and records for 2019 reflect the following information: Salary earned this year$65,000 Interest on savings account (credited to her account in 2019, withdrawn in 2020) 1,000 Interest on county bonds earned and collected in 2019 2,000 What is the amount Ms. Marple should include in her gross income in 2019?
66,000
A single taxpayer provided the following information for 2019: Salary$80,000 Interest on local government bonds (qualifies as a tax exclusion) 4,000 Allowable itemized deductions 13,000 What is taxable income?
67,000
Reva is a single taxpayer with a taxable pension of $24,000, tax-exempt interest of $8,000, and Social Security benefits of $10,000. What is the amount of her taxable Social Security benefits?
7050
Derrick was in an automobile accident while he was going to work. The doctor advised him to stay home for eight months due to his physical injuries. The resulting lawsuit was settled and Derrick received the following amounts: Compensatory damages for physical injury$80,000 Punitive damages95,000 How much of the settlement must Derrick include in ordinary income on his tax return?
95,000
What is an important aspect of a limited liability partnership?
A partner has unlimited liability arising from his or her own acts of negligence or misconduct or similar acts of any person under his or her direct supervision, but does not have unlimited liability in other matters.
Ray is starting a new business with a friend and trying to decide between a C corporation, S corporation, and partnership. Which of the following statements regarding his decision is correct?
A partner in a partnership is taxed on his or her share of partnership income.
Taxable income for an individual is generally defined as
AGI reduced by the greater of the standard deduction or itemized deductions.
Married couples will normally file jointly. Identify a situation where a married couple may prefer to file separately.
All A couple is separated and contemplating divorce. One spouse can be held responsible for the entire tax liability. The spouse with lower income has substantial medical expenses.
A taxpayer can receive innocent spouse relief if
All the understated tax is attributable to erroneous items of the other spouse. under the circumstances, it would be inequitable to hold the innocent spouse liable for the understated tax. the innocent spouse did not know and had no reason to know that there was an understatement of tax.
The term "tax law" includes
All of the above. Treasury Regulations. Internal Revenue Code. judicial decisions.
Which of the following criteria is not required to be met under the tax concept of income?
Cash must be received.
When returns are processed, they are scored to determine their potential for yielding additional tax revenues. This program is called
Discriminant Function System
Which of the following statements regarding the qualified tuition plans (QTP) is incorrect?
Distributions made from a QTP for college tuition will be tax-free in addition to qualifying for the American Opportunity credit or lifetime learning credit.
Which of the following statements regarding qualified tuition programs is incorrect?
Distributions of income are taxed to the donor if the proceeds are not used for qualified education expenses.
Eva and Lisa each retired this year and started receiving distributions from their respective retirement plans. Eva's plan was funded with all pre-tax contributions, whereas Lisa's plan was funded with only after-tax contributions (Roth plan). With respect to the tax treatment of their retirement plan distributions
Eva's distributions will be fully taxable, and Lisa's distributions will not be taxable.
Firefly Corporation is a C corporation. Freya owns all of the stock. During the current year Firefly earned taxable income of $500,000 and paid a $300,000 dividend to Freya. Which of the following statements is correct?
Firefly will pay corporate income tax on its earnings, and Freya will pay individual income tax on the dividends.
Which of the following items will result in an inclusion in gross income?
George won $50 at his church's bingo game night.
Which of the following statements is incorrect?
Gift taxes are imposed on the recipient of a gift.
Heather is an advertising executive with a major advertising agency. A significant part of her job is selling advertising campaigns to clients and potential clients. Heather spent $6,000 taking clients and potential clients to lunch and dinners in restaurants and discussed advertising campaigns during the meals. For some major accounts, the dinners were followed by taking the clients to Broadway shows. Heather is reimbursed for these meals and tickets after she turns in receipts and other appropriate documentation. What is the appropriate treatment of the reimbursement?
Heather will exclude the reimbursement from income and will not take any deduction for the expenses.
Under the terms of their divorce agreement, Humphrey transferred Corporation H stock to his former wife, Greta, as a property settlement. At the time of the transfer, the stock had a basis to Humphrey of $40,000 and a fair market value of $55,000. What is the tax consequence of this transaction to Humphrey, and what is Greta's basis in the Corporation H stock?
Humphrey has no gain or loss; Greta's basis is $40,000.
Which of the following serves as the highest authority for tax research, planning, and compliance activities?
Internal Revenue Code
Anna is supported entirely by her three sons John, James, and Joseph who provide for her support in the following percentages: John: 10%, James: 40%, Joseph: 50% Assuming a multiple support declaration exists, which of the brothers may claim his mother as a dependent?
James or Joseph
Roma Company pays for group term life insurance on a non-discriminatory basis for all 100 of its workers. Which of the following individuals, all of whom work in the business, will be allowed to exclude the value of the coverage from her gross income?
Jamila is president and 51% shareholder of Roma Company which is a C corporation.
Which of the following individuals is most likely to be audited?
Marvella has a $145,000 net loss from her unincorporated business (a horse farm). She also received $950,000 salary as a CEO of a corporation.
Which of the following statements is false?
Municipal bond interest is taxable.
The regular standard deduction is available to which one of the following taxpayers?
None a person who has only unearned income and is a dependent of another a married taxpayer filing a separate return where the other spouse itemizes a nonresident alien
Arthur pays tax of $5,000 on taxable income of $50,000 while taxpayer Barbara pays tax of $12,000 on $120,000. The tax is a
Proportional tax
While using a metal detector at the beach during spring break, Toni uncovered some rare coins with a current fair market value of $9,000. What are her tax consequences regarding this find?
She reports the entire FMV as income.
Until about 100 years ago, attempts to impose a federal income tax were ruled unconstitutional. The amendment to the U.S. Constitution allowing the imposition of a federal income tax is the
Sixteenth Amendment
Trisha is married and has young children. The couple is in the 37% tax bracket. In order for Trisha and her husband to work, they pay $5,000 for daycare which earns them a $1,000 dependent care credit. Trisha has been offered a new job. The new job will pay a $5,000 lower salary, but the new employer will offer $5,000 of paid child care. Trisha cannot claim the dependent care credit if she receives employer-paid child care. Which of the following statements is correct? (Ignore payroll taxes.)
Trisha will have $850 additional after-tax income if she accepts the new job.
Which of the following bonds do not generate tax-exempt income for federal income tax purposes?
U.S Treasury Bonds
You may choose married filing jointly as your filing status if you are married and both you and your spouse agree to file a joint return. Which of the following facts would prevent you from being considered married for filing purposes?
You were married for several years, but your divorce became final in December.
Examples of income which are constructively received include all of the following except
a paycheck received from employer, when employer does not have funds in the bank to cover the check.
Which of the following is least likely to result in a constructive dividend?
a sale of a corporation's asset to a shareholder at fair market value
In 2017 Betty loaned her son, Juan, $10,000 to help him buy a car. In 2019, before he repaid the $10,000, Betty told Juan that she was "tearing up" the $10,000 note as a graduation present. How should Juan treat the amount forgiven?
excludible gift in year of forgiveness
Which of the following advance payments cannot qualify for income tax deferral?
advance collection of rent without associated services
With respect to property settlements in a divorce or separation, all of the following are true with the exception of
all a property settlement does not result in income to either spouse. the spouse receiving a property settlement has a basis equal to the basis of that property to the paying spouse prior to payment. no tax deduction is allowed for payment of a property settlement.
Speak Corporation, a calendar-year, cash-basis taxpayer, sells packages of foreign language lessons to individuals planning to work overseas. In December 2019, it sold and received payment for $600,000 of 24-month lesson packages to be provided evenly through 2020 and 2021. Speak Corporation will recognize the $600,000 of income
all in 2019
Speak Corporation, a calendar-year, accrual-basis taxpayer, sell packages of foreign langauge lessons to individuals planning to work overseas. In December 2019, it sold and received payment for $600,000 of 24-month lesson packages to be provided evenly through 2020 and 2021. Speak Corporation will recognize the $600,000 of income
all in 2020
Which of the following is not a social objective of the tax law?
an exclusion for interest earned by large businesses
A couple will be getting divorced in 2019, resulting in the payment of alimony. Alimony paid in 2019 will be
an item which does not affect the payor's or the payee's tax reporting.
Child support is
an item which does not affect the payor's or the payee's tax reporting.
In an S corporation, shareholders
are taxed on their proportionate share of earnings.
The term "Social Security benefits" does not include
supplementary Medicare benefits.
The requirements for a payment to be considered as alimony include all of the following except
be made in cash or property.
Form 4868, a six-month extension of time to file, allows a taxpayer to
extend the filing date of the return but the estimated amount of tax due must still be paid by the original due date of the return.
All of the following items are included in gross income except
child support payments received.
Which of the following steps, related to a tax bill, occurs first?
consideration by the House Ways and Means Committee
Which one of the following items is not considered gross income for tax purposes?
face amount of life insurance received due to the death of the insured
Which of the following is not excluded from income?
fair market value of prize won on a game show
When property is transferred, the gift tax is based on
fair market value on the date of transfer.
A couple was divorced in 2016, resulting in the payment of alimony. Alimony paid in 2019 is
deductible by the payor and included in income by the payee.
Which of the following is not an advantage of a limited liability company (LLC)?
default tax treatment as a corporation, unless otherwise elected
When new tax legislation is being considered by Congress
different versions of the House and Senate bills are reconciled by a Joint Conference Committee.
All of the following fringe benefits paid for by the employer may be excluded from an employee's gross income except
discounts on services of 25 percent.
Which of the following credits is considered a refundable credit?
earned income credit
Distributions from corporations to the shareholders in a nonliquidating distribution will usually be classified as a dividend up to the amount of the corporation's
earnings and profits
Which of the following is not one of Adam Smith's canons of taxation?
economic stimulation
Benefits covered by Section 132 which may be excluded from an employee's gross income do not include
employer-provided vehicle for personal use.
Which of the following dependent relatives does not have to live in the same household as the taxpayer who is claiming head of household filing status?
father
Which of the following taxes is progressive?
federal income tax
To qualify as an abandoned spouse, the taxpayer is not required to
have a son or daughter in the home for the entire year.
Tobe is a 22-year-old college student with $5,000 of interest income and $6,000 of earned income. Kiddie tax will apply to him if
he is a full-time student and the cost of his support exceeds $12,000.
In order to qualify to file as surviving spouse, all of the following criteria must be met by the widow or widower except
he or she and the decedent must have shared the same household as of date of death.
All of the following are requirements for excluding employee achievement awards except for
if paid in cash, must be less than $400.
The unified transfer tax system
imposes a single tax upon transfers of property during an individual's life and at death.
Insurance proceeds received because of the destruction of property are
included in gross income only to the extent the proceeds exceed the adjusted basis of the replacement property.
The largest source of revenues for the federal government comes from
individual income taxes
All of the following items are generally excluded from income except
interest on corporate bonds.
Daniel plans to invest $20,000 in either a corporate bond paying 5% or a tax-exempt bond with a 4% interest rate. The bonds have an equivalent level of risk. Daniel has a 35% marginal tax rate and wants to maximize his after-tax earnings. Daniel should
invest in the tax-exempt bond since its yield is more than the after-tax return on the corporate bond.
The computer is the primary tool of the tax professional. The tax professional uses the computer for all of the following client services except
investment purchases on behalf of clients.
In October 2019, Joy and Paul separated and have not lived with each other since, but they are still legally married. They do not file a joint return. Joy supports their children after the separation and pays the cost of maintaining their home. Joy's filing status in 2019 and 2020 is, respectively
married filing separately and head of household.
Which filing status reaches the 37% marginal rate at the lowest level of taxable income?
married filing seperately
When a spouse dies, the surviving spouse for the year of death
may file a married filing jointly return.
Satish, age 11, is a dependent of his parents. His only source of income in 2019 is $8,000 of interest income on bonds given him by his grandparents, resulting in taxable income of $6,900. Under kiddie tax rules, calculation of tax requires dividing taxable income between net unearned income and earned taxable income. Satish's taxable income will be divided as follows:
net unearned income -$5,800 and earned taxable income -$1,100.
Yusef, age 15, is a dependent of his parents. In 2019 he earned $5,000 from a part-time job and $8,000 of interest income on bonds given him by his grandparents, resulting in taxable income of $7,650. Under kiddie tax rules, calculation of tax requires dividing taxable income between net unearned income and earned taxable income. Yusef's taxable income will be divided as follows
net unearned income -$5,800 and earned taxable income -$1,850.
David has been diagnosed with cancer and is expected to live less than 18 months. David is covered by a life insurance policy with a $400,000 face amount. David cashes in the policy early under a special option and receives 80% of the face amount or $320,000. In the year of collection, David will report
no income
Which of the following is not a taxpaying entity?
partnership
Jillian has just accepted an offer from accounting firm for a full-time position after completion of her master's degree. In addition to paying a high salary and premiums on the basic health insurance policy, the firm will pay the benefits listed below. Which of the following benefits can be excluded (assume the benefits are provided on a non-discriminatory basis to all employees)?
payment of eyecare coverage
The corporate tax rate is
proportional
Which is not a component of tax practice?
providing clients tax refund advance loans
Which of the following is not an objective of the federal income tax law?
redistribution of wealth
A tax bill introduced in the House of Representatives is then
referred to the House Ways and Means Committee for hearings and approval.
Which of the following is not included in gross income when received?
refundable security deposit
Jan purchased an antique desk at auction. For two years, the desk sat in Jan's garage until she decided to restore it. This year, while cleaning and restoring the desk, Jan discovered $1,500 in a hidden compartment inside one drawer. With respect to the $1,500, Jan must
report $1,500 on this year's tax return.
In 2016, Leo's wife died. Leo has two small children, ages 2 and 4, living at home whom he supports entirely. Leo does not remarry and is not claimed as a dependent on another's return during any of this period. In 2017, 2018, and 2019, Leo's most advantageous filing status is, respectively
surviving spouse, surviving spouse, head of household.
The IRS must pay interest on
tax refunds paid later than 45 days after the due date.
In 2017 Bonnie, a sole proprietor, loaned her employee, John, $10,000 to help him buy a car. In 2019, before he repaid the $10,000, Bonnie told John that she was "tearing up" the $10,000 note in recognition of his strong job performance. How should John treat the amount forgiven?
taxable income in year of forgiveness
Vertical equity means that
taxpayers with larger amounts of income should pay more tax than taxpayers with lower amounts of income.
Horizontal equity means that
taxpayers with the same amount of income should pay the same amount of tax.
Assuming a calendar tax year and the conventional 15th of the month due date, all of the following business entities must file their 2019 tax returns by the March 15, 2020 except
the C corporation
Parents often wish to shift income to young children in order to lower the family tax burden. Tax policies and provisions that limit that practice include all of the following except
the claim of right doctrine
The discharge of certain student loans is excluded from income if all of the following are present except for
the loan forgiveness is based on age
All of the following statements are true except
the net income of an S corporation is subject to double taxation because it is taxed at the entity level and dividends paid from the S corporation to individual shareholders are also taxed.
In order to shift the taxation of dividend income from a parent to a child
the parent must transfer ownership of the stock to the child.
A married taxpayer may file as head of household under the abandoned spouse provisions if all of the following are met except
the taxpayer must have been married for at least 2 years
One of the requirements that must be met in order to defer recognition of income for advance payments for goods is
the taxpayer's method of accounting for the sale for tax purposes is the same as the method used for financial reporting purposes.
Cafeteria plans are valuable to employers because
they allow employers to avoid paying for benefits that are not needed or desired by employees.