1.(TCO A) Which of the following does not constitute tax evasion?(Points : 5)

Claiming commuting miles as business miles Backdating a check and claiming deduction in previous year Donating your IRA distributions to charity Claiming a deduction for $500 to the Trump for President Committee

Question 2.2.(TCO C) Which of the following items is not subject to federal income tax?(Points : 5)

The interest on U.S. Treasury bonds Gambling winnings The interest on loans made in the ordinary course of business Life insurance proceeds

Question 3.3.(TCO B) Sam owes Bob $8,000. Bob cancels (forgives) the debt. The cancellation is not a gift, and Sam is bankrupt. Which of the following statements is correct concerning the impact of this transaction?(Points : 5)

Both Bob and Sam recognize $8,000 of taxable income. Bob recognizes $8,000 of taxable income. Sam recognizes $8,000 of taxable income. Neither Bob nor Sam has any taxable income from this transaction.

Question 4.4.(TCO G) All of the following income items are includible in an employee's gross income except _____.(Points : 5)

severance pay for the cancellation of employment the amount received for personal injuries an accrued vacation moving expense reimbursement

Question 5.5.(TCO F) Hobby expenditures are deductible to the extent of _____.(Points : 5)

total individual gross income hobby gross income trade or business gross income nonbusiness gross income

Question 6.6.(TCO C) Joe is a sole proprietorship. He desires to be taxed as a corporation. What does he need to do?(Points : 5)

Write a letter to the IRS requesting the change File Form 2553 File Form 8832 Simply file Form 1120

Question 7.7.(TCO F) Debbie is a 50% owner in MAE Inc., an S corporation. MAE Inc. had the following results from operations in 2016: ordinary business income of $30,000, charitable contributions of $5,000, and long-term capital gain of $3,000. How much income should Debbie report on Schedule E?(Points : 5)

$15,000 $30,000 $10,000 $13,000