1. Megs employer carries insurance on its employees that will pay an employee his or her regular salary while the employee is away from work due to illness. The premiums for Megs coverage were $1,800. Meg was absent from work for two months as a result of a kidney infection. Her employers insurance company paid Meg's regular salary of $8,000 while she was away from work. Meg also collected $2,000 on a wage continuation policy she had purchased. Meg must include $11,800 in her gross income.

a. True b. False

2. The earnings from a qualified state tuition program account are deferred from taxation until they are used for qualified higher education expenses. At that time, the amount taken from the fund must be included in the gross income of the person who contributed to the account, unless they are used to pay for qualified higher education expenses. a. True

b. False

3. Section 212 expenses that are related to rent and royalty income are deductions for AGI. a. True

b. False

4. An expense needs to be recurring in order to be ordinary. a. True

b. False