QUESTION 26

On November 15, 2021, X Corp., an accrual basis taxpayer, enters into a contract which will provide the corporation with the use of manufacturing equipment for the 5 year period beginning on January 1, 2022. X Corp. paid $100,000 for the 5-year period on December 1, 2021. How much, if any of the payment can X Corp. deduct in 2021?

	a.	$0
	b.	$100,000
	c.	$1,667.67
	d.	$20,000

1 points

QUESTION 27

Tommy receives a scholarship of $25,000 from Taylor University to be used to pursue a bachelor's degree. He spends $19,000 on tuition, $1,700 on books and supplies, $4,000 for room and board and $300 for personal expenses. How much may Tommy exclude from his gross income?

	a.	$4,300
	b.	$0
	c.	$20,700
	d.	$19,000

1 points

QUESTION 28

Jenn's employer offers a 50% match on an employee's contributions to the employee's 401(k) plan up to 5% of the employee's salary. Jenn earns $100,000 and she contributes $19,500 to her 401(k) this year. How much does Jenn's employer contribute to her 401(k) under its matching plan?

	a.	$5,000
	b.	$3,000
	c.	$9,750
	d.	$2,500

1 points

QUESTION 29

Adam, age 51, is unmarried and is not an active participant in a qualified retirement plan. His modified AGI is $52,000 in 2022. The maximum amount that Adam can deduct for a contribution to a traditional IRA is:

	a.	$7,000
	b.	$0
	c.	$3,500
	d.	$6,000

1 points

QUESTION 30

Allies husband Jonathan died during the current year. She was the beneficiary of his life insurance policy in the face amount of $400,000. Because Allie likes to go on expensive vacations, she is concerned that she will spend all the money in a few months. She decides to leave the money with the insurance company and will take the money out over a period of twenty years. In the current year, Allie receives a check for $25,000 from the insurance company. What are the tax consequences, if any, of this payment to Allie?

	a.	The entire amount of each payment is excluded from her gross income as life insurance proceeds
	b.	$20,000 of each payment is not taxable and $5,000 is taxable
	c.	The entire amount of each payment is taxable
	d.	$5,000 of each payment is not taxable and $20,000 is taxable