True or False Taxpayer (T), a cash basis individual taxpayer, bought a bond for $8,760 on January 1, 2019, with a maturity value of $10,000 on January 1 2022 (meaning there are no scheduled payments other than the $10,000 received at maturity) Assume the yield to maturity is 4 5 on an annual basis If the bond is a series EE government bond T will not be required to include any gross income in 2019, but if the bond is issued by a corporation, T must include $394 20 ($8,760 4 5 ) in gross income in 2019 (Write T for true or F for false) True or False Taxpayer (T) an individual calendar year taxpayer can take a deduction for qualifying medical expenses and the standard deduction in the same year (Write T for true or F for false) True or False An advance payment received in June 2019 by an accrual basis and calendar year taxpayer for services to be provided over a 36 month period, can be spread over the 36 month period for tax reporting purposes (Write T for true or F for false) On January 1, Year 1, Taxpayer (T) purchased both a bond and stock of Corporation X The bond was purchased for $10,000, had a face value of $10,000 and paid 10 interest ($1,000) on December 31 of each year The stock was purchased for $10,000 and paid a dividend of $1,000 on December 31, ex dividend date December 15 T sold both the X stock and the X bond on July 1, of Year 1 The bond sold for $10,300 and the stock sold for $11,000 What income, gain or loss, including character type (e g capital gain, interest, dividend, ordinary) will T recognize as a result of the sales BOND STOCK Taxpayer (T), a cash basis individual taxpayer, lent money to each of his two daughters (D1 and D2) on January 1 of the current yer T lent $50,000 to D1 and $110,000 to D2 T did not charge any interest on the loans D1 was 19 years old and used the $50,000 to open a brokerage account which invested in stocks D1 had $300 of net investment income during the year D 2 was 26 years old and used the loan to renovate her personal house D2 had no investment income during the year The applicable federal rate AFR is a 5 annual rate The loans were outstanding for the entire year What amount of income, if any, will T include on Ts individual income tax return as a result of the loan to D1 D2 Taxpayer (T) a 59 year old calendar year individual taxpayer purchased an annuity from an insurance company for $100,000 in 2019 The terms of the annuity were that the company would pay T $5,000 a year to T for the rest of Ts life How much income will T include in Ts personal income tax return as a result of receiving the $5,000 payment in 2020 In 2050 In 2019, Taxpayer (T) is a single, 65 year old individual who is a U S citizen T turned 65 in 2019 T receives $18,000 of social security income in 2019 (the first year T received Social Security Benefits) Also, T received $6,000 of interest income from a municipal bond in both 2018 and 2019 On June 1, 2018, T took a job with a multi national corporation which paid T $5,000 per month As a condition of the job, T is required to work overseas, in the country of Austria, and T did in fact work in Austria for 214 days (From June 1 December 31) in 2018 T is offered to continue to work (still in Austria and still for $5,000 per month) for seven additional months (from January 1 until the end of July, which is 211 days) in 2019, at which point Ts position would terminate T is trying to decide whether T wants to continue to work for seven months in 2019 or quit on January 1 (These are Ts only transactions during 2018 and 2019) What is Ts Gross Income in 2019 if T continues to work through July of 2019 What is Ts Gross Income in 2019 if T does NOT continue to work in 2019 Excluding the effects of the payroll tax and any credits, What is the economic benefit to T of continuing to work for 7 months in 2019 (meaning how much total extra money, after tax, will T have as a result of continuing to work in 2019) As part of a tax relief plan to counter the economic effects of the Coronavirus, Congress has proposed sending $1,200 to certain individual taxpayers If this provision were passed, would the recipients have to include the $1,200 in income Answer yes or no and provide a BRIEF explanation (brief means 1 or 2 sentences only)

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True or False. Taxpayer (T), a cash basis individual taxpayer, bought a bond for $8,760 on January 1, 2019, with a maturity value of $10,000

True or False. Taxpayer (T), a cash basis individual taxpayer, bought a bond for $8,760 on January 1, 2019, with a maturity value of $10,000 on January 1 2022 (meaning there are no scheduled payments other than the $10,000 received at maturity). Assume the yield to maturity is 4.5% on an annual basis. If the bond is a series EE government bond T will not be required to include any gross income in 2019, but if the bond is issued by a corporation, T must include $394.20 ($8,760*4.5%) in gross income in 2019?

______ (Write T for true or F for false)

True or False. Taxpayer (T) an individual calendar year taxpayer can take a deduction for qualifying medical expenses and the standard deduction in the same year?

______ (Write T for true or F for false)

True or False. An advance payment received in June 2019 by an accrual basis and calendar year taxpayer for services to be provided over a 36-month period, can be spread over the 36 month period for tax reporting purposes?

______ (Write T for true or F for false)

On January 1, Year 1, Taxpayer (T) purchased both a bond and stock of Corporation X. The bond was purchased for $10,000, had a face value of $10,000 and paid 10% interest ($1,000) on December 31 of each year. The stock was purchased for $10,000 and paid a dividend of $1,000 on December 31, ex- dividend date December 15. T sold both the X stock and the X bond on July 1, of Year 1. The bond sold for $10,300 and the stock sold for $11,000. What income, gain or loss, including character type (e.g. capital gain, interest, dividend, ordinary) will T recognize as a result of the sales?

__________________________________ BOND

__________________________________ STOCK

Taxpayer (T), a cash basis individual taxpayer, lent money to each of his two daughters (D1 and D2) on January 1 of the current yer. T lent $50,000 to D1 and $110,000 to D2. T did not charge any interest on the loans. D1 was 19 years old and used the $50,000 to open a brokerage account which invested in stocks. D1 had $300 of net investment income during the year. D 2 was 26 years old and used the loan to renovate her personal house. D2 had no investment income during the year. The applicable federal rate AFR is a 5% annual rate. The loans were outstanding for the entire year. What amount of income, if any, will T include on Ts individual income tax return as a result of the loan to

D1______________________ D2 ____________________

Taxpayer (T) a 59 year-old calendar year individual taxpayer purchased an annuity from an insurance company for $100,000 in 2019. The terms of the annuity were that the company would pay T $5,000 a year to T for the rest of Ts life. How much income will T include in Ts personal income tax return as a result of receiving the $5,000 payment

in 2020? _____________

In 2050? ______________

In 2019, Taxpayer (T) is a single, 65 year-old individual who is a U.S. citizen. T turned 65 in 2019. T receives $18,000 of social security income in 2019 (the first year T received Social Security Benefits). Also, T received $6,000 of interest income from a municipal bond in both 2018 and 2019. On June 1, 2018, T took a job with a multi-national corporation which paid T $5,000 per month. As a condition of the job, T is required to work overseas, in the country of Austria, and T did in fact work in Austria for 214 days (From June 1 December 31) in 2018. T is offered to continue to work (still in Austria and still for $5,000 per month) for seven additional months (from January 1 until the end of July, which is 211 days) in 2019, at which point Ts position would terminate. T is trying to decide whether T wants to continue to work for seven months in 2019 or quit on January 1. (These are Ts only transactions during 2018 and 2019).

What is Ts Gross Income in 2019 if T continues to work through July of 2019?

__________________________________

What is Ts Gross Income in 2019 if T does NOT continue to work in 2019?

__________________________________

Excluding the effects of the payroll tax and any credits, What is the economic benefit to T of continuing to work for 7 months in 2019 (meaning how much total extra money, after tax, will T have as a result of continuing to work in 2019)?

_____________________

As part of a tax relief plan to counter the economic effects of the Coronavirus, Congress has proposed sending $1,200 to certain individual taxpayers. If this provision were passed, would the recipients have to include the $1,200 in income? Answer yes or no and provide a BRIEF explanation. (brief means 1 or 2 sentences only).