Chapter 3

Chapter 3 - Acct 3400 Taxation of Individuals Chapter 3...

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Acct 3400 Taxation of Individuals Chapter 3 Practice Questions Question 1: Lonny had the following amounts of income during the year. Determine whether the income is included or excluded from gross income: Wage and Tips $60,000 Dividends on Stock $500 Interest on Utah bonds $800 Life insurance proceeds $20,000 Accident insurance proceeds (compensatory) $100,000 Accident damages (punitive) $500,000 Gain on sale of property $5,000 Explanation: Wages and tips, dividends on the stock, punitive damages and gain on the sale of property are included in gross income. Interest on Utah bonds, life insurance proceeds, and accident insurance proceeds which are compensatory in nature are excluded from gross income. Question 2: Carlotta is 99 years old. She is single, lives alone, and has never been married. During her career she founded a profitable shoe store chain called Speedy Souls and she still earns income on the Speedy Souls stock she owns. Although she needs a walker to get around, her mind, eyes, and other senses
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This note was uploaded on 03/26/2011 for the course ACTG 3400 taught by Professor Durkee during the Spring '11 term at Weber.

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Chapter 3 - Acct 3400 Taxation of Individuals Chapter 3...

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