Determine whether each of the following are considered Earned or Unearned Income items

1. Alimony Received Earned / Unearned
2. Business Income Earned / Unearned
3. Dividend Income Earned / Unearned
4. Interest Income Earned / Unearned
5. Unemployment Compensation Earned / Unearned
6. Wages, Salaries & Tips Earned / Unearned

1. Wages, salaries and tips are considered taxable income?
   1. True
   2. False

8. Although tax-exempt interest is not taxable, it must be reported on Schedule B.
   1. True
   2. False

9. Ordinary dividends received by individuals are taxed at the same rate as ordinary income.
   1. True
   2. False

10. Unemployment compensation is considered taxable income

1. True
2. False

11. Alimony received under the terms of a divorce agreement entered into in 2020 is taxable to the recipient
    1. True
    2. False

12. Except as otherwise provided, gross income means all income from whatever source derived.

1. True
2. False

13. Allen, an electrician, installs a new light fixture for Fred, a plumber, in exchange for installing a new sink. Each individual was going to charge the other $300. However, they merely exchanged services. Since no cash changed hands, who is required to report any income.

1. Neither
2. Ellan Only
3. Frank Only
4. Both

14. Kim, is a self-employed bookkeeper who owns her own business, and spent the following on meals and entertainment:

• $1,000 on meals for herself for the year
• $3,000 on meals to entertain her customers

What amount will Kim report as deductible meals and entertainment?

1. $ 500
2. $1,500
3. $3,000
4. $4,000

15. Kim completes a job and is owed $5,000 by a customer in 2020. The customer pays $3,000 in cash, and also gives her a table valued at $1,500 plus provides $500 in services. How much income will the Kim report on her return as gross income?
    1. $3,000
    2. $3,500
    3. $4,500
    4. $10,000

16. Kim also had the following expenses for business:
    • Advertising $500
    • Supplies $200
    • Insurance $300
    • Travel $500 (100% for a family vacation)

What amount will Kim report as qualifying business expenses? _______________