Multiple choice questions:
1. The definition of gross income in the tax law is:
a. All items specifically listed as income in the tax law
b. All cash payments received for goods provided and services performed
c. All income from whatever source derived
d. All income from whatever source derived unless the income is earned illegally
2. Which of the following is not taxable for income tax purposes?
a. Interest income on savings accounts
b. Income from real estate investments
c. Child support
d. Dividend income from stock
e. All of the above are taxable
3. All of the following items are taxable to the taxpayer receiving them, except:
a. Bonuses
b. Unemployment compensation
c. Gifts
d. Prizes
e. Gambling winnings
4. Which of the following types of income is tax exempt?
a. Worker’s compensation
b. Income earned illegally
c. Dividends from foreign corporations
d. Dividends from closely held corporations
e. Dividends from utility corporations’ stock
5. Which of the following is included in gross income?
a. Loans
b. Inheritances
c. Tuition and books scholarships
d. Rewards
e. None of the above
6. Which of the following prizes or awards is taxable?
a. Professional sports awards
b. Prizes from a television game show
c. Awards for superior performance on the job
d. A one-acre lot received as a prize
e. All of the above are taxable