Question 1261 pts

In 2021, Jason declared bankruptcy. In the bankruptcy proceeding, the following debts of David were forgiven:

$10,000 credit card debt $15,000 unsecured loan from Bank of America $20,000 unsecured loan from Greg Smith, a friend of Jason

In 2021, how much taxable income does Jason recognize from the above debt that was discharged in bankruptcy?

Group of answer choices

$0

$10,000

$25,000

$45,000

Flag question: Question 127

Question 1271 pts

On 6/1/2021, Frasier was insolvent. He had liabilities of $200,000, and assets of $0. He owed the following amounts which were forgiven to him on 6/1/2021.

$50,000 debt to his brother Hansen $75,000 debt to a credit card company $25,000 debt to his friend Amy $50,000 debt to his father Philip

In 2021, how much taxable income does Frasier recognize from the above debt that was discharged when he was insolvent?

Group of answer choices

$0

$75,000

$125,000

$200,000

Flag question: Question 128

Question 1281 pts

Jenny bought her primary residence on 1/1/2010 for $300,000. She put $50,000 of her own money as the downpayment, and borrowed $250,000 from a bank for the remainder of the purchase price. On 1/1/2021, she was laid off from her job, and she could not make her mortgage payments. On 6/30/2021, the bank foreclosed on the house, and took the house back from Jenny. On 6/30/2021, the house was worth $150,000, and she owed $200,000 to the bank. The bank sold the house for $150,000 which the bank used to pay off most of the $200,000 that Jenny owed. The bank forgave the remaining $50,000 that Jenny owed the bank, pursuant to the foreclosure.

In 2021, how much taxable income does Jenny recognize from the bank forgiving the home loan to Jenny?

Group of answer choices

$250,000

$200,000

$50,000

$0

Flag question: Question 129

Question 1291 pts

On 3/31/2021, Elaine declared bankruptcy. Elaine had purchased a boat for $10,000 with a credit card prior to the bankruptcy. As part of the bankruptcy process, the credit card company forgave Elaine all of the debt that Elaine owed to the credit card company, including the $10,000 that was used to purchase the boat. The credit card company did not repossess the boat pursuant to the bankruptcy. The fair market value of the boat on 3/31/2021 was $5,000. The fair market value of the board on 6/31/2021, when the bankruptcy was finalized was $4,500. What is Elaine's basis in the boat after the bankruptcy discharged her debt?

Group of answer choices

$5,000

$4,500

$0

$10,000

Flag question: Question 130

Question 1301 pts

Daniel purchased a life insurance policy on his life, and named Evelyn, his wife, as the beneficiary. Daniel paid $50,000 for the life insurance policy. Upon Daniel's death, the life insurance policy would pay $500,000 to Evelyn. On 6/30/2021, Daniel died. On 8/30/2021, the insurance company paid Evelyn $500,000 pursuant to the life insurance policy.

How much of the insurance policy payment does Evelyn include in her taxable income in 2021?

Group of answer choices

$500,000

$0

$450,000

$225,000

Flag question: Question 131

Question 1311 pts

On 5/30/2021, Duberstein received a gift of $100,000 in cash from his father Mark. Which of the following is true in regards to the gift received by Duberstein?

Group of answer choices

If there is any tax on the gift, Mark is responsible for paying the tax.

If there is any tax on the gift, Duberstein is responsible for paying the tax.

There is never a tax associated with the giving or receipt of a gift.

As the gift was under $12 million, there is no tax associated with the gift of $100,000.

Flag question: Question 132

Question 1321 pts

On 10/1/2021, Gregory inherited a house from his deceased father, Alex. On 10/1/2021, the house was worth $500,000. Alex bought the house on 1/1/1990 for $50,000. On 10/1/2021, Gregory also inherited a car worth $20,000. Alex purchased the car for $40,000 on 1/1/2019. On 10/1/2021, Gregory also inherited $100,000 in cash.

How much does Gregory include in his taxable income in 2021 from his inheritance?

Group of answer choices

$620,000

$570,000

$0

$100,000

Flag question: Question 133

Question 1331 pts

On 1/1/2021, Diane was involved in a vehicle accident. Diane sued Devon, the other driver. Devon was found to be 100% at fault. Devon paid Diane the following amounts pursuant to the lawsuit:

1. $10,000 for physical injuries that Diane sustained in the accident. 2. $20,000 for medical care for Diane 3. $40,000 for punitive damages 4. $20,000 to replace Diane's car. Diane's basis in her car at the time of the accident was $20,000, and $0 after the accident.

How much of the above does Diane include in her taxable income in 2021?

Group of answer choices

$10,000

$40,000

$60,000

$0

Flag question: Question 134

Question 1341 pts

In 2021, Melanie worked for Grover. Instead of helping purchase medical insurance for their employees, Grover directly reimburses their employee, and their employees' family's medical expenses. Grover's reimbursements do not discriminate in favor of highly compensated employees. In 2021, Grover paid for the following expenses of Melanie:

$1,000 of medical care for Melanie $2,000 of medical care for David, Melanie's 10 year old son. $3,000 of medical care for Cecilia, Melanie's 5 year old daughter.

Of all the reimbursements provided by Grover, how much does Melanie include in her taxable income in 2021?

Group of answer choices

$0

$1,000

$3,000

$6,000

Flag question: Question 135

Question 1351 pts

In 2021, Mario purchased medical insurance for himself, his wife Maria, and his son Manuel, through his employer. The medical policy costed $15,000. Mario paid $1,000 toward the medical insurance premium, and his employer paid $14,000 toward the medical insurance premium. In addition, Mario paid the medical insurance company $1,500 in co-payments. The medical insurance paid the following benefits to Mario and his family:

1. $2,000 medical care for Mario. 2. $1,500 medical care for Maria. 3. $3,000 medical care for Manuel.

Of all the amounts mentioned, how much does Mario include in his taxable income in 2021?

Group of answer choices

$1,000

$14,000

$6,500

$0

Flag question: Question 136

Question 1361 pts

In which of the following situations would the value of the meals furnished by the employer to the employee, would not be included in the taxable income of the employee?

Group of answer choices

When the meals are sent to the employee's personal residence.

When the meals are provided on the business premises after normal business hours.

When the meals are provided on the business premises for the convenience of the employer.

When the employee pays for at least 50% of the cost of the meal

Flag question: Question 137

Question 1371 pts

In 2021, Kristina's primary residence was destroyed in a fire, in a federally declared disaster area. In 2021, after her house was destroyed, Kristina had to live in a motel for 6 months. In 2021, Kristina's insurance company paid Kristina $100,000 to cover the cost of the motel and her other living expenses. Which of the following statements is true?

Group of answer choices

All $100,000 will be included in Kristina's taxable income in 2021.

The amount of reimbursement for the cost of the motel is not included in Kristina's taxable income, but the amounts for food are included in Kristina's taxable income.

The amount of reimbursement for food will not be included in Kristina's taxable income, but the amount for the motel will be included in Kristina's taxable income.

None of the $100,000 will be included in Kristina's taxable income.

Flag question: Question 138

Question 1381 pts

Gloria's work benefits included a cafeteria plan offered by her employer. The cafeteria plan offered the following benefits to Gloria:

1. Receive company paid health insurance, or $12,000 cash. 2. Receive company paid group life insurance policy, or $1,000 cash. 3. Receive company paid child care benefit, or $5,000 cash.

Gloria chooses to take the company paid health insurance, and the paid child care benefit. Gloria chooses to receive $1,000 in cash instead of taking the company paid group life insurance policy. Which of the following is true?

Group of answer choices

Gloria must include $1,000 in her taxable income.

Gloria must include $17,000 in her taxable income.

Gloria must include $18,000 in her taxable income.

Gloria includes an additional $0 in her taxable income.

Flag question: Question 139

Question 1391 pts

Veronica works for Amazon. Veronica attends college in hopes of getting an accounting degree. As an employee benefit, Amazon paid the following expenses incurred by Veronica:

$6,000 for tuition $3,000 for books $1,000 for supplies.

How much of the above must Veronica include in her taxable income?

Group of answer choices

$0

$4,750

$5,250

$10,000

Flag question: Question 140

Question 1401 pts

David's employer provided child care services at the worksite to the employees. The employees do not pay anything for the child care services. In 2021, David took advantage of the benefit, and received child care services valued at $8,000 from his employer. In 2021, how much of the benefit does David include in his taxable income?

Group of answer choices

$8,000

$0

$5000

$3000