CHAPTER 4 PRACTICE QUIZZES

CHAPTER 4 PRACTICE QUIZZES - CHAPTER 4 PRACTICE QUIZZES 1.

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CHAPTER 4 PRACTICE QUIZZES 1. Doris and Bob incurred medical expenses towards the end of last year in the  amount of $6,000. They itemized their deductions for that tax year. Now, they  received a check for $2,000 of the previously deducted medical expenses.  They ask you how the partial reimbursements should be treated on their  income tax return this year. What do you tell them? Your Answer: <0> You should tell Doris and Bob that because they benefited from the medical  deductions taken in the previous year, they now must include in income an  amount equal to the tax benefit that was derived from the deduction in the  previous year. Because the deduction was $6,000, the entire amount of  $2,000 will need to be included in gross income in the current year. This  outcome is generally referred to as an application of the tax benefit rule. 1.
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This note was uploaded on 03/24/2012 for the course ACC 314 taught by Professor Dee during the Spring '12 term at Gardner-Webb.

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CHAPTER 4 PRACTICE QUIZZES - CHAPTER 4 PRACTICE QUIZZES 1.

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