Kaylee is a member of the U.S. Armed Forces on active duty who moved because of a permanent change in station. She incurred the following moving expenses:
Transportation of furniture and household goods: $1,000
Air fare for Kaylee: $300
Air fare for Kaylee’s husband and children: $900
House-hunting trip: $1,100

2. Kaylee's employer reimburses her $3,300 for the above expenses. Assuming that Kaylee meets all other requirements, how much income does Kaylee have as a result of this reimbursement of her moving expenses?

 2. options:

a)

$0

b)

$900

c)

$1,100

d)

$2,000

2. Megan accepts an assignment working in Germany for the first 9 months of 2018 from Ferguson Corporation. Ferguson Corporation paid Megan’s salary of $78,000 plus an additional $7,000 bonus. Megan paid $5,000 to the German government in taxes on this income. During 2018, Megan also earned $9,000 of interest income from corporate bonds and $4,000 of dividend income from U.S. corporations. The maximum foreign earned income exclusion for 2018 is $103,900. How much should Megan include in her gross income on her U.S. tax return for 2018?

 2. options

a)

$98,000

b)

$20,000

c)

$13,000

d)

$0

3.Stephanie, a taxpayer in the 24% marginal tax bracket, borrows $100,000 at 7% interest to invest in 6% tax-exempt municipal bonds (annual loan interest expense is $7,000). What is Stephanie’s interest expense deduction?

3. options:

a)

$0

b)

$1,000

c)

$6,000

d)

$7,000