QUESTION 1 Buck owns corporate bonds with detachable interest coupons. Interest of $1,000 is payable each January 1 and July 1. On December 31 of Year 1, Buck gave his son the coupons for the interest payments due on January 1 and July 1 of Year 2. When the interest is received by his son in Year 2, how is it taxed? a. $2,000 to his son. b. $1,000 to Buck and $1000 to his son. c. None, since $2,000 was taxed to Buck in Year 1. d. $2,000 to Buck. 1 points

QUESTION 2 Medical expenses recovered after being claimed as a deduction in the previous year must be included in your income in the year of recovery to the extent that the deductions decreased the federal income taxes paid in the year they were deducted. True False 1 points

QUESTION 3 Which of the following is not considered actual receipt or "constructive receipt" of income in the current year? a. Taxpayer B received a check on December 30 of the current year for services rendered but was unable to make a deposit until January 4 of the following year. b. Taxpayer A was informed his check for services rendered was available on December 15 of the current year, but he waited until January 15 of the following year to pick up the check. c. Earned income of Taxpayer A was received by his agent on December 29 of the current year but not received by A until January 5 of the following year. d. A payment on a sale of real property was placed in escrow on December 15 of the current year but not received by Taxpayer A until January 10 of the following year, when the transaction was closed. 1 points

QUESTION 4 Which of the following does not have to be included in gross income? a. Prize from church raffle. b. Free tour from travel agency for organizing a group of tourists. c. Unemployment compensation. d. Damages from personal injury lawsuit involving back injuries. 1 points

QUESTION 5 Which of the following should not be included in Mr. W's gross income for the current year? a. A new car worth $7,000 given to Mr. W by his employer for his valuable services. b. Interest on U.S. Treasury bills, notes, and bonds issued by an agency of the United States. c. Life insurance proceeds of $10,000 received as a beneficiary as a result of the death of Mr. W's brother. d. $200 in dental work Mr. W received in exchange for repairs made by Mr. W to his dentist's residence. 1 points

QUESTION 6 Roger, age 19, is a full-time student at Excellent College and a candidate for a bachelor's degree. His tuition and fees are $4,000 per year. During the current year, he received the following payments: State scholarship for 10 months $3,600 Loan from college financial aid office 1,500 Cash support from parents 3,000 Cash dividends on investments 700 Cash prize awarded in newspaper contest 500 What is Roger's gross income for the current year? a. $700 b. $1,200 c. $4,800 d. $9,300 1 points

QUESTION 7 During the current year, Hal sustained a serious injury in the course of his employment. As a result of this injury, Hal received the following payments during the year: Worker's compensation $2,400 Reimbursement from employer's health insurance plan for medical expenses paid by Hal and not deducted by him 1,800 Damages for personal injuries 8,000 The amount to be included in Hal's gross income for the current year should be: a. $12,200 b. $8,000 c. $1,800 d. $0 1 points

QUESTION 8 Gladys invests in bonds. In the current year, she received the following interest income: California general revenue bonds $ 800 New York City sanitation fund bonds 1,000 Seattle School District bonds 400 AT&T 20-year bonds 600 How much interest income may Gladys exclude from gross income? a. $0 b. $800 c. $1,800 d. $2,200 e. $2,800 1 points

QUESTION 9 Ms. Green is single and over 65 years old. She received the following income in the current year: Interest from certificates of deposit $3,000 Tax-exempt interest 6,000 Taxable dividends 5,000 Taxable pension 20,000 Wages from consulting work 9,000 Social security benefits 14,000 She did not have any adjustments (above the line deductions) to her income. What is the taxable amount of Ms. Green's social security benefits? a. $7,000 b. $9,000 c. $11,900 d. $14,000 e. $18,000 1 points

QUESTION 10 On January 1, 2014, Tammy, a vice-president of Toledo National Bank (TNB), was transferred to France to work in a French subsidiary of TNB. Tammy stayed in France for the entire year and was paid a salary of $74,500. She also had interest income of $24,000 from U.S. savings accounts. Tammy's U.S. gross income for the year is: a. $0 b. $24,000 c. $74,500 d. $98,500