· Question 1
2 out of 2 points
The alimony recapture rules are intended to:
· Question 2
2 out of 2 points
A sole proprietorship purchased an asset for $1,000 in 2013 and its value was $1,500 at the end of 2013. In 2014, the sole proprietorship sold the asset for $1,400. The sole proprietorship realized a taxable gain of $400 in 2014 but an economic loss of $100 in 2014.
· Question 3
2 out of 2 points
ABC Corporation declared a dividend for taxpayers of record as of December 24, 2013. The dividend checks were mailed on December 31, 2013. Ed, a cash basis shareholder, received the dividend check on January 2, 2014. Ed cannot delay reporting the income from the dividend until 2014.
· Question 4
2 out of 2 points
Barney painted his house which saved him $3,000. According to the realization requirement, Barney must recognize $3,000 of income.
· Question 5
2 out of 2 points
Normas income for 2013 is $27,000 from part-time work and $9,000 of Social Security benefits. Norma is not married. A portion of her Social Security benefits must be included in her gross income.
· Question 6
2 out of 2 points
Under the terms of a divorce agreement, Kim was to pay her husband Tom $7,000 per month in alimony. Kims payments will be reduced to $3,000 per month when their 9 year-old son becomes 21. The husband has custody of their son. For a twelve-month period, Kim can deduct from gross income (and Tom must include in gross income):
· Question 7
2 out of 2 points
Turner, Inc., provides group term life insurance to the officers of the corporation only. Janet, a vice-president, received $400,000 of coverage for the year at a cost to Turner, Inc. of $5,600. The Uniform Premiums (based on Janets age) are $15 a year for $1,000 protection. How much of this must Janet include in gross income this year?
· Question 8
2 out of 2 points
Debbie is age 67 and unmarried and her only sources of income are $200,000 in taxable interest and $20,000 of Social Security benefits. Debbies adjusted gross income for the year is:
· Question 9
2 out of 2 points
The realization requirement gives an incentive to own assets that have increased in value and to sell assets whose value has decreased.
· Question 10
2 out of 2 points
Tom, a cash basis taxpayer, purchased a bond on March 31 for $10,000, plus $100 accrued interest. In December, Tom collected $500 interest from the bond. Toms interest income from the bond for the year is $500.