ACC341B test 2 on chapters 5 & 6

ACC341B test 2 on chapters 5 & 6 - Name ACC341B...

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Name___________________________________ ACC341B Individual Taxation 70 points True/False 2 points each 20 POINTS TOTAL 1.____ Ashley received a scholarship to be used as follows: tuition $9,000; room and board $6,000; and books and laboratory supplies $2,000. Ashley is required to include only $6,000 in her gross income. 2.____ Sam was unemployed for the first two months of 2010. During that time, he received $4,000 of state unemployment benefits. He worked for the next six months and earned $14,000. In September, he was injured on the job and collected $5,000 of workers’ compensation benefits. Sam’s Federal gross income from the above is $18,000 ($4,000 + $14,000). 3.____ Sarah’s employer pays the hospitalization insurance premiums for a policy that covers all employees and their family members. Sarah can exclude from her gross income the premiums for herself and her family members. 4.____ Nicole’s employer pays her $150 per month towards the cost of parking near a railway station where Nicole catches the train to work. The employer also pays the cost of the rail pass, $75 per month. Nicole can exclude both of these payments from her gross income. 5.____ A taxpayer who claims the standard deduction can also deduct expenses that are classified as deductions from AGI. 6.____ Expenses incurred in a trade or business are deductible for AGI. 7.____ All employment related expenses are classified as deductions for AGI. 8.____ A loss on the sale of a personal use asset cannot be deducted. 9.____ A bribe paid to a domestic (U.S.) official is not deductible, but it may be possible to deduct a bribe paid to a foreign official. 10.____ Fines and penalties paid for violations of the law (e.g., illegal dumping of hazardous waste) are deductible only if they relate to a trade or business. Multiple Choice 3 points each 36 points total 11. Jena is a full-time student at State University and is claimed by her parents as a dependent. Her only source of income is a $10,000 scholarship ($1,000 for books, $4,000 tuition, $500 student activity fee, and $4,500 room and board). Jena’s gross income for the year is: a. $5,000.
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b. $4,500.
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ACC341B test 2 on chapters 5 & 6 - Name ACC341B...

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