Question 1

Tim receives a $25,000 gift from his parents for a down payment on a house.They know he can not buy a house without their help.They write "gift" in the memo line of the check.How much of the gift is taxable to Tim?

Accepted Answer

The answer of Tim receives a $25,000 gift from his...

Question 2

Cash allowances for meals or lodging generally must be included in the employee's income.

Accepted Answer

Cash allowances for meals or lodging are considered taxable income and must be included in the employee's gross income. However, there are certain exceptions and rules for specific types of travel expenses related to business purposes. Consult with a tax professional for more information.

Question 3

Robert works for American Motors.American Motors pays a $1,200 premium on Robert's health insurance in 2017.Robert has an operation on his big toe in 2017 that cost $7,200.The insurance company paid for $6,800 of it.Which one of the following is true for 2017?

Accepted Answer

None of these events are taxable on his 2017 return. The premium paid by his employer for health insurance is not considered taxable income for Robert. Similarly, the insurance company paying for a portion of his medical expenses is not taxable income. Therefore, Robert does not need to claim either the premium or the insurance payment as income on his tax return.

Question 4

Amounts received by an employee as reimbursement for medical expenses under a policy provided by the taxpayer's employer are excluded from gross income.

Accepted Answer

Amounts received as reimbursement for medical expenses under a policy provided by the taxpayer's employer are excluded from gross income and not subject to taxation.

Question 5

If an employer claims a business deduction for group health insurance premiums paid on behalf of his employees,the amount must be included in the employees' gross income.

Accepted Answer

The amount of group health insurance premiums paid by the employer on behalf of their employees is excluded from the employees' gross income and is not taxable.

Question 6

Joey is a single taxpayer.Joey's employer pays $1,800 per year for his health insurance.During the year,Joey had medical expenses of $2,500 and the insurance company reimbursed him for the full $2,500.How much of the above amounts,if any,must be included in Joey's gross income? Why?

Accepted Answer

The answer of Joey is a single taxpayer.Joey's employer pays...

Question 7

Nicole is a student at USB Law School;she receives a $52,000 scholarship for 2017.Of the $52,000,$40,000 is used for tuition,$5,000 is used for books,and $7,000 is used for room and board.How much of the scholarship is excluded from taxable income for Nicole in 2017?

Accepted Answer

The scholarship is excluded from taxable income to the extent it is used for qualified expenses. Qualified expenses include tuition, fees, books, supplies, and equipment required for courses of instruction. Room and board are not qualified expenses. Therefore, $45,000 of the scholarship is excluded from taxable income for Nicole in 2017.

Question 8

Payments made by an employer for health insurance on behalf of an employee are considered income to the employee at the time the payments are made.

Accepted Answer

Employer payments for health insurance on behalf of an employee are generally not considered taxable income to the employee. These payments are typically made on a pre-tax basis, reducing the employee's taxable income.

Question 9

To pay for college,Henry received the following: $1,000 scholarship from the Thespian Club to pay for books
$4,000 scholarship from the Elks Lodge for tuition
$5,000 worth of room and board as a dorm supervisor through a work-study program
​
How much income must Henry report on his tax return?

Accepted Answer

Henry must report the $5,000 worth of room and board he received through the work-study program as income on his tax return. Scholarships used for tuition and books are not taxable, but work-study earnings are considered taxable income.

Question 10

Karina receives a scholarship of $10,000 to a college.She is also given a job which pays $5,000 a year to help with her expenses.$7,000 of the scholarship is earmarked for tuition and $3,000 is for room and board.How much of the money from the scholarship and the job are taxable to Karina?

Accepted Answer

The answer of Karina receives a scholarship of $10,000 to...

Question 11

Geoff is a company president who has had a very good year at work.The owner of the company is pleased and gives him a gift of $50,000 at the end of the year.The owner writes "gift" in the memo section of the check.How much of the gift is taxable to Geoff?

Accepted Answer

The answer of Geoff is a company president who has...

Question 12

Elmore receives a rental property as an inheritance from his grandmother.The rental is worth $500,000 and Elmore collected rental income of $24,000 during the year.
For the year,how much is Elmore's gross income as a result of the inheritance?

Accepted Answer

The answer of Elmore receives a rental property as an...

Question 13

Which of the following may be excluded from income?

Accepted Answer

A) Payment for the loss of an arm is excluded from income as it is considered damage or loss.
B) Premiums for health insurance paid by the employer are excluded from income as it is considered a fringe benefit.
C) Reimbursement from the insurance company for a physical examination is excluded from income if the expense was originally paid with after-tax dollars. 
Therefore, all of the above are excluded from gross income.

Question 14

Marco and his family are covered by his company's health insurance plan.The health insurance costs his company $8,500 a year.During the year,Marco's daughter is diagnosed with a serious illness and the health insurance pays $25,000 for treatment.How much of the insurance and treatment costs are taxable to Marco?

Accepted Answer

The answer of Marco and his family are covered by...

Question 15

The value of lodging provided to a professor to enable him to live near the campus is excluded from gross income.

Accepted Answer

The answer of The value of lodging provided to a...

Question 16

Amounts received as scholarships for books and tuition may be excluded from the recipient's taxable income.

Accepted Answer

According to the IRS, scholarships used for tuition and books are generally tax-free. However, if the scholarship covers room and board, it may be taxable.

Question 17

Kim earned $30,000 from Pfizer before she was laid off.She then collected $7,000 of unemployment benefits.Finally,Kim received a $12,500 scholarship for tuition so she could return to college to earn a microbiology degree.How much does Kim need to report as income on her tax return?

Accepted Answer

The answer of Kim earned $30,000 from Pfizer before she...

Question 18

In June of the current year,a wealthy aunt gave Janie a stock portfolio worth $150,000.During the year,she collects $4,000 in dividends.How much of these amounts,if any,should Janie include in gross income for the current year? Why?

Accepted Answer

The answer of In June of the current year,a wealthy...

Question 19

In which of the following cases may the employee exclude the meals and/or lodging:

Accepted Answer

According to IRS regulations, meals and lodging can be excluded from an employee's income if they are provided on the business premises of the employer and for the convenience of the employer. In choice B, the headmaster is required to be on campus all night, which means the lodging is provided for the convenience of the employer. Therefore, the meals and lodging can be excluded from the employee's income. Choices A, C, and D do not meet the requirements for exclusion.

Question 20

A scholarship for room and board granted in 2017 is fully taxable to the recipient.

Accepted Answer

According to the IRS, a scholarship for room and board is considered taxable income to the recipient, and must be reported on their tax return if it exceeds the cost of tuition and qualified educational expenses.

Quiz 2: Gross Income and Exclusions

Tim receives a $25,000 gift from his parents for a down payment on a house.They know he can not buy a house without their help.They write "gift" in the memo line of the check.How much of the gift is taxable to Tim?

Cash allowances for meals or lodging generally must be included in the employee's income.

Robert works for American Motors.American Motors pays a $1,200 premium on Robert's health insurance in 2017.Robert has an operation on his big toe in 2017 that cost $7,200.The insurance company paid for $6,800 of it.Which one of the following is true for 2017?

Amounts received by an employee as reimbursement for medical expenses under a policy provided by the taxpayer's employer are excluded from gross income.

If an employer claims a business deduction for group health insurance premiums paid on behalf of his employees,the amount must be included in the employees' gross income.

Joey is a single taxpayer.Joey's employer pays $1,800 per year for his health insurance.During the year,Joey had medical expenses of $2,500 and the insurance company reimbursed him for the full $2,500.How much of the above amounts,if any,must be included in Joey's gross income? Why?

Nicole is a student at USB Law School;she receives a $52,000 scholarship for 2017.Of the $52,000,$40,000 is used for tuition,$5,000 is used for books,and $7,000 is used for room and board.How much of the scholarship is excluded from taxable income for Nicole in 2017?

Payments made by an employer for health insurance on behalf of an employee are considered income to the employee at the time the payments are made.

To pay for college,Henry received the following: $1,000 scholarship from the Thespian Club to pay for books $4,000 scholarship from the Elks Lodge for tuition $5,000 worth of room and board as a dorm supervisor through a work-study program How much income must Henry report on his tax return?

Karina receives a scholarship of $10,000 to a college.She is also given a job which pays $5,000 a year to help with her expenses.$7,000 of the scholarship is earmarked for tuition and $3,000 is for room and board.How much of the money from the scholarship and the job are taxable to Karina?

Geoff is a company president who has had a very good year at work.The owner of the company is pleased and gives him a gift of $50,000 at the end of the year.The owner writes "gift" in the memo section of the check.How much of the gift is taxable to Geoff?

Elmore receives a rental property as an inheritance from his grandmother.The rental is worth $500,000 and Elmore collected rental income of $24,000 during the year. For the year,how much is Elmore's gross income as a result of the inheritance?

Which of the following may be excluded from income?

The value of lodging provided to a professor to enable him to live near the campus is excluded from gross income.

Amounts received as scholarships for books and tuition may be excluded from the recipient's taxable income.

Kim earned $30,000 from Pfizer before she was laid off.She then collected $7,000 of unemployment benefits.Finally,Kim received a $12,500 scholarship for tuition so she could return to college to earn a microbiology degree.How much does Kim need to report as income on her tax return?

In June of the current year,a wealthy aunt gave Janie a stock portfolio worth $150,000.During the year,she collects $4,000 in dividends.How much of these amounts,if any,should Janie include in gross income for the current year? Why?

In which of the following cases may the employee exclude the meals and/or lodging:

A scholarship for room and board granted in 2017 is fully taxable to the recipient.

Quiz 2: Gross Income and Exclusions

Tim receives a $25,000 gift from his parents for a down payment on a house.They know he can not buy a house without their help.They write "gift" in the memo line of the check.How much of the gift is taxable to Tim?

Cash allowances for meals or lodging generally must be included in the employee's income.

Robert works for American Motors.American Motors pays a $1,200 premium on Robert's health insurance in 2017.Robert has an operation on his big toe in 2017 that cost $7,200.The insurance company paid for $6,800 of it.Which one of the following is true for 2017?

Amounts received by an employee as reimbursement for medical expenses under a policy provided by the taxpayer's employer are excluded from gross income.

If an employer claims a business deduction for group health insurance premiums paid on behalf of his employees,the amount must be included in the employees' gross income.

Joey is a single taxpayer.Joey's employer pays $1,800 per year for his health insurance.During the year,Joey had medical expenses of $2,500 and the insurance company reimbursed him for the full $2,500.How much of the above amounts,if any,must be included in Joey's gross income? Why?

Nicole is a student at USB Law School;she receives a $52,000 scholarship for 2017.Of the $52,000,$40,000 is used for tuition,$5,000 is used for books,and $7,000 is used for room and board.How much of the scholarship is excluded from taxable income for Nicole in 2017?

Payments made by an employer for health insurance on behalf of an employee are considered income to the employee at the time the payments are made.

To pay for college,Henry received the following: $1,000 scholarship from the Thespian Club to pay for books $4,000 scholarship from the Elks Lodge for tuition $5,000 worth of room and board as a dorm supervisor through a work-study program ​ How much income must Henry report on his tax return?

Karina receives a scholarship of $10,000 to a college.She is also given a job which pays $5,000 a year to help with her expenses.$7,000 of the scholarship is earmarked for tuition and $3,000 is for room and board.How much of the money from the scholarship and the job are taxable to Karina?

Geoff is a company president who has had a very good year at work.The owner of the company is pleased and gives him a gift of $50,000 at the end of the year.The owner writes "gift" in the memo section of the check.How much of the gift is taxable to Geoff?

Elmore receives a rental property as an inheritance from his grandmother.The rental is worth $500,000 and Elmore collected rental income of $24,000 during the year. For the year,how much is Elmore's gross income as a result of the inheritance?

Which of the following may be excluded from income?

The value of lodging provided to a professor to enable him to live near the campus is excluded from gross income.

Amounts received as scholarships for books and tuition may be excluded from the recipient's taxable income.

Kim earned $30,000 from Pfizer before she was laid off.She then collected $7,000 of unemployment benefits.Finally,Kim received a $12,500 scholarship for tuition so she could return to college to earn a microbiology degree.How much does Kim need to report as income on her tax return?

In June of the current year,a wealthy aunt gave Janie a stock portfolio worth $150,000.During the year,she collects $4,000 in dividends.How much of these amounts,if any,should Janie include in gross income for the current year? Why?

In which of the following cases may the employee exclude the meals and/or lodging:

A scholarship for room and board granted in 2017 is fully taxable to the recipient.

To pay for college,Henry received the following: $1,000 scholarship from the Thespian Club to pay for books $4,000 scholarship from the Elks Lodge for tuition $5,000 worth of room and board as a dorm supervisor through a work-study program How much income must Henry report on his tax return?