Chipper borrowed money from several creditors for

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Question 19   (5 points) Chipper borrowed money from several creditors for personal uses. At a time when his assets are worth $120,000  and his debts are $140,000, his creditors agree on a compromise settlement in which they forgive $26,000 of the  debt. How much of the $26,000 is included in Chipper's Gross Income?  Student response: Correct Response Student Response Answer Choices a. $ - 0 - x b. $ 6,000 c. $13,000 d. $20,000 e. $26,000 Question 20   (5 points) Old North University waives tuition for all graduate assistants. The waiver is granted because they are research  and teaching assistants. What are the tax effects of the tuition waiver amounts? I-The value of the waivers is a form of compensation. II-The value of the waivers must be included in the taxable income of the recipients.  Student response: Correct Response Student Response Answer Choices x
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View Results Question 1 (5 points) Ray is a programmer with Dilation Electronics Corporation. His annual salary is $50,000. As part of his compensation package, he receives a term-life insurance policy equal to his annual salary. All members of the programming staff receive this benefit. Members of the sales staff have a cafeteria plan from which to select various benefits including life and health insurance coverage. I-Ray has an excludable amount of income because of the nature of his employment benefit. II-Ray must include $50,000 in his gross income because that is the value of the insurance benefit. III-Ray must include the cost of the insurance policy in his gross income. IV-If the benefit is only available to "key" employees and Ray is a "key" employee, he may exclude the cost of the premiums paid from his gross income. Student response: Correct Response Student Response Answer Choices Question 2 (5 points) Fanny's employer has a qualified pension plan. The employer makes all payments into the plan; employees do not contribute to the plan. During the current year, the employer pays $4,000 into the plan on Fanny's behalf. The plan also earns $3,000 during the year on the balance in Fanny's retirement account. Which of the following statements is true? I-Fanny is not taxed on the $4,000 in the current year. II-Fanny is not taxed on the $3,000 in the current year. Student response: Correct Response Student Response Answer Choices
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Christopher Reinemann
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