Quiz 1 correjido Grade Details 1.Question:(TCO A) A taxpayer may litigate a tax dispute without first paying the tax in the: Your Answer: U.S. District CourtU.S. Tax CourtCORRECTU.S. Court of Federal ClaimsAll of the above Instructor Explanation: Chapter 2 Points Received: 6 of 6 2.Question:(TCO F) A business bad debt is deductible for tax purposes as a(n): Instructor Explanation: Chapter 6. IRC Sec. 166. Points Received: 6 of 6 3.Question:(TCO I) Under the cash method of tax accounting, tax deductions are generally taken when: Points Received: 6 of 6 4.Question:(TCO A) Which of the following does not constitute tax evasion?
Points Received: 6 of 6 5.Question:(TCO C) Which of the following items is not subject to federal income tax? Your Answer: Interest on U.S. Treasury bonds.Gambling winnings.Interest on loans made in the ordinary course of business.Life insurance proceeds. CORRECT Instructor Explanation: Chapter 5. Life insurance proceeds are excluded from gross income. IRC Sec. 101. Points Received: 6 of 6 6.Question:(TCO B) Sam owes Bob $8,000. Bob cancels (forgives) the debt. The cancellation is not a gift and Sam is neither insolvent nor bankrupt. Which of the following statements is correct concerning the impact of this transaction? Points Received: 6 of 6
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