1. Jena is a full-time student at atState University and is claimed by her parents as a dependent. Her only source of income is a $6,000 scholarship($400 for books, $3,000 tuition, $200 athletic fee, and $2,400 room and board). Jena’s gross income for the year is:
a. $0.
b. $400.
c. $2,600.
d. $3,000.
e. None of the above.
2. The taxpayer is a Ph.D. student in accounting at State University. The student is paid $1,000per month for teaching two classes.
a. The $1,000 is excludable if allPh.D. students are required to teach.
b. The $1,000 is excludable because of itis a gift.
c. The $1,000 is considered a scholarship and, therefore, is excluded.
d. Only $500 is included in income.
e. None of the above.
3. Legal fees incurred in connection with a criminal defense are deductible if the crime is associated with a trade or business.
a. True
b. False
4. Jacques, who is not a U.S. citizen, makes a contribution to the campaign of a candidate for governor. A contribution by a noncitizen is illegal under state law. Cassie, a U.S. citizen, makes a contribution to the same campaign fund. The contribution by Cassie deductible, while the contribution by Jacques is not.
a. True
b. False
5. If a vacation home is primarily rental, a deduction for all of the rental expenses is allowed.
a. True
b. False
6. Goodwill must be capitalized and can not be amortized.
a. True
b. False