For answers submitted, I live in Albany, NY. I must follow NYS guidelines for all questions. If you have any questions, please do not hesitate to contact me.

1. On July 1, 20x1, a dance studio received $3,600 for 72 dance lessons to be given over the next 3 years. Thirty lessons were given in both 20x1 and 20x2; the remaining 12 lessons were given in 20x3. The studio uses the accrual method of accounting. How much of the $3,600 is included in gross income in 20x1, 20x2, and 20x3?

2. Joyce is self-employed. She uses the calendar year and the cash method of accounting. What amount must Joyce include in gross income for December? She reports the following activities for December: Received $10,000 from clients for services to be performed next year Received $30,000 for services performed in December Records $15,000 in accounts receivable for work performed in December Received $2,000 for services performed in November

3. Dan's taxable income falls in the 10% tax bracket. Included in his taxable income is $5,000 of ordinary dividends, of which $2,000 are qualified dividends. The amount of tax Dan will pay on his qualified dividends is?

4. A corporation issues a 30-year, $10,000 bond for less than face value (at a discount). At the time the bond is issued, the tax law will consider the OID to be de minimis if it does not exceed?

5. As part of their divorce agreement, Harry transfers to Mary, his former spouse, GM stock with a market value of $30,000. Harry had $20,000 invested in the stock. How does this transfer affect Harry, and what is Mary's basis in the stock?

6. An employee receives $100 in tips during March. She reports the tips to her employer. Which of the following statements is correct regarding tips? A) The employer adds the $100 to the employee's wages and withholds income tax, social security tax, and Medicare tax on the amount. B) The employer reports the $100 as allocated tips on the employee's W-2. C) The employer adds the tips to the employee's wages and withholds income taxes, but not social security or Medicare taxes, on the amount. D) The employer adds the tips to the employee's wages and withholds social security and Medicare taxes, but not income taxes, on the amount.

7.On November 1 of the current year, a cash basis investor pays $10,208 for bonds. The bonds pay $250 interest on June 1 and December 1. Included in the purchase price is $208 of accrued interest. On December 1 of the current year, the corporation pays the investor $250. What amount does the investor include in gross income in the current year?

8. On August 1 of the current year, an unmarried taxpayer retires and begins receiving monthly pension checks in the amount of $2,200. During her working years, the taxpayer contributed $5,720 to her employer's pension plan with after-tax dollars. Using the taxpayer's age at the time the payments begin, the taxpayer's number of expected monthly payments is 260. Of the $11,000 in pension benefits the taxpayer received during the current year, what amount must she include in gross income?

9. Timmy, age 8, received taxable interest of $4,400 during the year. He has no other income, and no itemized deductions. Timmy is a dependent of his parents. Which of the following statements is true? A) The kiddie tax does apply; $2,300 will be taxed at his parents' rate, and $1,050 will be taxed at Timmy's rate B) The kiddie tax does apply; $4,400 will be taxed at his parents' rate C) The kiddie tax does not apply; $4,400 is taxable at Timmy's rate D) The kiddie tax does apply; $2,300 will be taxed at his parents' rate, and $2,100 will be taxed at Timmy's rate E) The kiddie tax does not apply; $3,350 will be taxed at Timmy's rate

10. Brian, a calendar-year taxpayer, purchased an annuity contract which started paying him $54 each month on June 1, of the current year. The annuity cost him $2,400, and it has an expected return of $7,200. How much of this annuity is includable in gross income for the current year? 11. An unmarried taxpayer itemized deductions in 20x1. The taxpayer's itemized deductions were $6,850; the standard deduction amount that year was $6,300. Included in the taxpayer's itemized deductions were $3,700 of state income tax withheld. In 20x2, the taxpayer receives an $800 refund check from the state government. What amount must the taxpayer include in gross income in 20x2? 12. Joe is a married taxpayer who files separately from his spouse. He has modified AGI of $125,000 (including $2,500 of net investment income). His net investment income (NII) tax is?