Question 1

The tax concept and economic concept of income are in agreement on which of the following:

Accepted Answer

A)  The fair rental value of an owner-occupied home should be included in income.
B)  The increase in value of assets held for the entire year should be included in income for the year.
C)  Rent income for 2018 collected in 2017 is income for 2017.
D)  All of these.E) C) and D)
F) A) and D)

Question 2

The annual increase in the cash surrender value of a life insurance policy:

Accepted Answer

A)  Is taxed according to the original issue discount rules.
B)  Is not included in gross income because the policy must be surrendered to receive the cash surrender value.
C)  Reduces the deduction for life insurance expense.
D)  Is exempt because it is life insurance proceeds.
E)  None of these.F) A) and B)
G) All of the above

Question 3

If the employer provides all employees with group term life insurance equal to twice the employee's annual salary, an employee with a salary of $50,000 has no gross income from the life insurance protection provided by the employer.

Accepted Answer

A) True 
 B)False

Question 4

On January 1, 2017, Faye gave Todd, her son, a 36-month certificate of deposit she purchased December 31, 2015, for $8,638. Faye gave Todd 1,000 shares of ABC, Inc., on December 2, 2017. The certificate had a maturity value of $10,000 and the yield to maturity was 5%. On November 30, 2017, ABC, Inc., had declared a dividend of $1.00 payable to stockholders of record on December 5th. How much interest and dividends should Todd include in his gross income for 2017?

Accepted Answer

Todd must report $454 of interest income...

Exam 4: Gross Income: Concepts and Inclusions

The annual increase in the cash surrender value of a life insurance policy:

Correct Answer
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The tax concept and economic concept of income are in agreement on which of the following:

Correct Answer
verified

Correct Answer
verified
Todd must report $454 of interest income...
View Answer

If the employer provides all employees with group term life insurance equal to twice the employee's annual salary, an employee with a salary of $50,000 has no gross income from the life insurance protection provided by the employer.

Correct Answer
verified

Exam 4: Gross Income: Concepts and Inclusions

The annual increase in the cash surrender value of a life insurance policy:

Correct AnswerverifiedShow Answer

The tax concept and economic concept of income are in agreement on which of the following:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedTodd must report $454 of interest income...View AnswerShow Answer

If the employer provides all employees with group term life insurance equal to twice the employee's annual salary, an employee with a salary of $50,000 has no gross income from the life insurance protection provided by the employer.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Todd must report $454 of interest income...
View Answer

Correct Answer
verified