All of the following items are generally excluded from gross income except O A. Life insurance proceeds B. Interest on corporate bonds C. Gift D. Interest on municipal bonds E. Child support Reset Selection John sued Norma who caused the car accident. John received the following settlement: Physical damage to his arms and legs caused by the accident $15,000; Loss of income while his physical injuries were healing $ 6,000; Punitive damages $30,000. How much of the settlement will be included in John's gross income? A. $21,000 B. $30,000 C. $36,000 D. $45,000 E. $51,000 Reset Selection All of the following items are deductions for adjusted gross income except O A. Interest on student loans B. Alimony paid C. Self-employed tax D. State and local income taxes Reset Selection Susie invests $250,000 in a city of Athens bond that pays 7% interest. Alternatively, Susie could have invested the $250,000 in a bond recently issued by Initech, Inc. that pays 9% interest with similar risk as the city of Athens bond. Assume that Susie's marginal tax rate is 32%. If Susie invested in the Initech Inc. bonds, what would be her after-tax rate of return? A. 5.04% B. 2.52% C. 7.00% D. 6.12% Chuck has AGI of $70,000 and has made the following payments State income tax $1,900 Federal income tax $7,100 Social Security tax $4,800 State excise tax on liquor $ 400 Real estate tax $ 790 Calculate the amount of taxes that Chuck can deduct on his itemized deductions: O A. $1,900 B. $2,690 C. $3,090 D. $9,000 E. $13,800 Brittany received the following income from her investments: Interest on Corporate bonds $2,000 Dividends on investing in Apple Inc. $3,000 Gain on the sale of McLean County school $3,000 bonds Interest on McLean County school bonds $5,000 Interest on the U.S. Government bonds $3,500 What is Brittany's gross income: A. $11,500 B. $5,500 C. $5,000 D. $8,500 E. $14,000 Quinn had the following transactions: Alimony received (divorce settled in 2016) Salary received Cash dividends received Gift received Quinn's AGI is: $8,000 $50,000 $1,000 $20,000 O A. $42,000 B. $50,000 OC. $51,000 OD. $59,000 E. $79,000 Marvin had the following transactions: Salary $50,000 Bank loan (used to buy personal auto) $10,000 Received a cash gift from aunt Marge $20,000 Paid alimony to his ex-spouse (divorce settled in 2017) $6,000 Paid child support $12,000 Marvin's AGI is: A. $32,000 B. $38,000 C. $44,000 D. $56,000 O E. $64,000 Shay is a full-time student at Yellowstone University and is claimed by her parents as a dependent. Her only source of income is a $23,500 scholarship ($500 for books, $15,000 for tuition, and $8,000 for room and board). Shay's gross income for the year is: A. $500 B. $8,000 C. $15,000 D. $20,000 E. $23,500 When a tax base is $60,000, the tax liability is $6,000 and when the tax base is $120,000, the tax liability is $12,000. This tax rate structure is: A. Regressive tax B. Progressive tax OC. Proportional tax D. None of the above
