Which of the following is true regarding punitive damages? a. Awards of punitive damages are taxable and included in gross income. b. Punitive damages are never taxable. Oc. The law is very vague on taxation of punitive damages. Od. Some punitive damages may be excluded from gross income if awarded as a result of physical injury. Which of the following is true regarding an exclusion? O a. An exclusion is temporary. b. An exclusion is permanent and never subject to taxation.. C. An exclusion may be temporary or permanent, depending on its nature. Od. An exclusion is very similar to a deferral. Which of the following is true regarding foreign-earned income? O a. Taxpayers may take a credit for any foreign taxes paid Ob. Taxpayers may take a credit for any foreign taxes paid, the allowable foreign tax credit is the lesser of the actual foreign taxes paid or the U.S. tax that would have been paid on the foreign- earned income Oc. Foreign-earned income is subject to double taxation d. The allowable foreign tax credit is the greater of the actual foreign taxes paid or the U.S. tax that would have been paid on the foreign-eared income. Which of the following statements is true regarding gifts? O a. The value of property received by gift has been excluded from income taxation since passage of the TCJA. Ob. The Internal Revenue Code defines a gift as proceeds from charity. C. Gifts are subject to double taxation. Od. The U.S. Supreme Court defined a gift as proceeds from a detached and disinterested generosity. Which of the following describes an employment-related exclusion? a. Foreign-earned income b. Life insurance proceeds c. Disaster relief payments Od. Inheritances Which of the following statements regarding improvements by a lessee is true? On A property owner has income when a lessee makes improvements to the owner's property O. There is an exclusion from income for improvements by a lessee when the improvements are made in lieu of rent. Oc A property owner does not have income when a lessee makes improvements to the owner's property or when such improvements revert to the property owner at the termination of the lease d. A property owner has income when improvements revert to the property owner at the termination of the lease. Which of the following is true regarding discharge of indebtedness? a. Borrowing money is a taxable event. Ob. The repayment of the loan principal generates taxable income. Oc. Solvency of the borrower is irrelevant to the rules of taxability around discharge of indebtedness. Od. If a lender forgives all or a portion of the debt, it is generally taxable to the borrower. Which of the following is true regarding payments from health and accident policies? a. Payments from employer-provided policies are includable in gross income for high-income taxpayers Ob. Exclusions for payments from employer provided policies are imited to medical care, loss of body parts, or payments for specific types of illnesses; however, disability payments (sick pay or wage-continuation plans) from an employer provided health and acodent plan are included in gross income c. There is no disparity in taxability of wage continuation payments between an employer or an employee-purchased policy Od. Disability payments (sick pay or wage continuation plans) from an employer provided health and accident plan are excluded from gross income Which of the following items is considered a tax-free return of human capital? O a. Workers' compensation payments received Ob. Damage payments received on account of emotional distress O c. Athletic facilities provided for employee by employer O d. Payments to qualified pension plans Which of the following is true regarding employment-related exclusions? a. They are intended to encourage double taxation for undesirable events. b. They are intended to provide equity in cases of double taxation, and they provide an incentive for employers and employees to engage in the specified activity O c. Payments by an employer to a pension plan are specifically includable. d. They pertain to issues like life insurance proceeds and scholarships Which of the following is true regarding income exclusions? a. Under the all-inclusive income concept, no income is taxable unless a specific provision can be found that includes it in taxation b. Under the all-inclusive income concept any income is taxable unless a specific provision can be found that exempts it from taxation. Under the legislative grace concept, only Congress can exempt an item from income tax. Oc. The all-inclusive concept is revoked under the CIA. Od. Under the legislative grace concept, only Congress can include an der from income tax Which of the following items are excludable as scholarships? a. Tuition and fees Ob. A scholarship in exchange for performing as a teacher's assistance in Writing 101 O c. A scholarship in exchange for aid with the athletic department O d. Room and board, if paid for on-campus accommodations Which of the following is true regarding a qualified working-condition fringe benefit? a. The TCJA allows an employer to deduct these expenses (paid for on behalf of an employee). Ob. Employees may exclude a portion of employer provided parking (up to $270/month) in 2020. O c. De minimis fringe benefits must be included as taxable income to the employee, if the employer pays these amounts on his or her behalf. d. Employer-provided parking is not designated as a working-condition fringe benefit since it is not normally deductible as an employee business expense. Which of the following is true regarding employment-related exclusions and their contributions to retirement? a. Self-employed individuals can establish and deduct contributions to a Keogh plan and an IRA at the same time. Ob. Self-employed individuals are not allowed to establish and deduct contributions to a Keogh plan or an IRA. Oc Qualified pension plan is a term, as it pertains to self-employed individuals, used to refer only to Roth IRAs or conventional IRAs. Od. Self-employed individuals can establish and deduct contributions to either a Keogh plan or an IRA, but not both. 3 Which of the following statements regarding employer-provided group term life insurance is true? O a. The exclusion applies to the insurance proceeds but does not exclude the premiums paid by the employer Ob. The exclusion applies to the insurance proceeds and premiums paid by the employer, this indudes premiums paid on plans that discriminate in favor of highly compensated employees Oc. The IRS provides a table that includes income from premiums paid in excess of the $50,000 exclusion Od. The exclusion applies to whole e insurance policies provided by the employer 4 5 Which of the following statements is true regarding stock dividends or stock splits? O a. A dividend paid in company stock increases a shareholder's wealth. O b. A dividend paid in company stock is always recognized as a capital gain. O c. A stock split does not increase a shareholder's wealth. O d. A stock dividend results in realized income. Which of the following is true regarding an exclusion? O a. An exclusion is temporary. b. An exclusion is permanent and is never subject to taxation. O c. An exclusion may be temporary or permanent, depending on the nature. Od. An exclusion is very similar to a deferral. Which of the following items are excluded from income as donative items? O a. Stock exchanged for services provided. b. The value of meals and lodging provided for the convenience of the employee. O c. Prescription drug plan waivers by large employers. d. Scholarships