Ch 5 Quiz - page 1 Chapter5: GrossIncome QUIZ 1. Arguably,...

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Chapter 5: Gross Income QUIZ 1. Arguably, free parking places provided to employees by their employers might be excluded from  taxable income on the grounds that a. such items neither satisfy the economic definition of income nor fall within the definition  of the income for tax purposes. b. any gain obtained by the employee is secondary or incidental to the employer's business  purpose that is served by granting such benefit. c. the value of the benefit obtained by the employee is not determinable. d. the benefit obtained by the employee is not in the form of cash. 2. In which of the following situations would the taxpayer  not  be considered in constructive receipt of  income in 2007? Assume that all of the taxpayers use the cash method of accounting. a. Al is a self-employed accountant. On December 27, 2007, he received a check for  $2,000 for preparing the November financial statements of one of his clients. Due to  illness, he was unable to deposit the check until January 5, 2008. b. Ben entered into a contract to sell his rental property on December 3, 2007. On that  date, the down payment, a check for $1,000, was placed in an escrow account. Ben  received the check when the transaction closed on January 20, 2008. c. Sugar Ray fought Rocky on December 25, 2007, a Christmas fight shown on television  all over the world. On December 28, the fight promoters gave Sugar Ray's agent, Don  Queen, a check for $5 million representing his prize money for the fight. Don delivered  the check to Sugar Ray on January 12, 2008. d.
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This note was uploaded on 03/25/2010 for the course ACCT 402 taught by Professor Toleno during the Spring '10 term at Providence College.

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Ch 5 Quiz - page 1 Chapter5: GrossIncome QUIZ 1. Arguably,...

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