Principles of Taxation

Business

Quiz 17 :

Tax Consequences of Personal Activities

Quiz 17 :

Tax Consequences of Personal Activities

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Unemployment benefits are excluded from gross income.
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True False
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False

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Congress provides an indirect subsidy to charities by allowing a deduction for charitable contributions.
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True False
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True

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Losses realized on the sale of personal use assets are deductible.
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True False
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False

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Gains realized on the sale of personal use assets are generally taxable.
True False
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Mia inherited $1 million from her deceased grandfather.Mia must include the inheritance in gross income.
True False
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Chad won a car valued at $25,000 from a game show.Because he immediately donated the car to the Red Cross,Chad can exclude $25,000 from gross income.
True False
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Under the terms of a 2014 divorce decree,Harold transferred his one-half interest in the marital residence to his former wife Francine.Francine must include the value of the interest in gross income.
True False
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This year,David paid his physician $6,200 for routine examinations and lab tests and received a $3,000 reimbursement from his medical insurance company.David is allowed to deduct the $3,200 unreimbursed medical expense as an above-the-line deduction.
True False
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Ben received a $5,000 tuition scholarship from his local community college.He can exclude the $5,000 from gross income.
True False
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Taxpayers include a maximum of 85% of Social Security benefits in gross income.
True False
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The cost of commuting to and from a place of employment is a nondeductible personal expense.
True False
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For federal income tax purposes,a taxpayer may elect to deduct state and local sales taxes ($10,000 maximum)as itemized deductions.
True False
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If alimony is paid under a 2015 divorce decree,the payments are included in the recipient's gross income.
True False
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For federal income tax purposes,property transfers pursuant to a divorce are nontaxable events.
True False
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For federal income tax purposes,a taxpayer may deduct state and federal employment taxes ($10,000 maximum)as itemized deductions.
True False
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Recipients of the Nobel Peace Prize must include the prize in gross income.
True False
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Gifts are not included in the recipient's gross income.
True False
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Mrs.Kronin received $16,200 child support payments from her former husband.These payments are excluded from Mrs.Kronin's gross income.
True False
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A drunk driver seriously injured Leah.The court awarded her $200,000 for her physical injuries and $300,000 as punitive damages.Leah must include $300,000 in gross income.
True False
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For purposes of the child credit,a child of divorced parents is considered a dependent of the custodial parent unless that parent agrees to allow the noncustodial parent to claim the child as a dependent.
True False
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