61. Jack received $3,000 in educational assistance benefits from his employer during 2013 to reimburse him for the cost of course tuition and fees for him to earn a degree. The benefits were paid under an accountable plan and were not included in Jack's W-2. He has a modified
adjusted gross income of $20,000 and he files single. A list of Jack's 2013 expenses follows. What is Jack's deductible tuition and fee expense? -$500 for a bowling class not required for his degree -$2,000 for accounting courses required for his degree -$500 for textbooks -$500 for lab fees for courses required for his degree.*a. $0b. $4,500c. $4,000d. $3,00062. Ned Norton, a calendar year taxpayer, purchased an annuity contract which pays him $54 per month beginning June 1, 2013. This annuity cost him $2,400, and it has an expected return of $7,200. How much of this annuity is includible in gross income for the 2013 calendar year? Correct Answer: * This question has been adapted from the AICPA Examinations. Norton must include $252 in gross income, determined as follows: Cost of Annuity = Exclusion Ratio Expected Return $2,400 = 1/3 $7,200 $54/mo. x 7 = $378 $378 x 1/3 = $126 Return of Investment $378 - $126 = $252 Ordinary Income 63. Henry Adams, an unmarried taxpayer, received the following amounts during 2013: Interest on savings accounts $1,000 Interest on municipal bonds 500 Dividends on General Steel common stock 750 Dividends on life insurance policies 200
How much taxable income should Henry report for 2013? Correct Answer: * This question has been adapted from the AICPA Examinations. Henry Adams's taxable income for 2013 is $1,750, computed as follows: Interest on savings account $1,000 Dividends on General Steel common stock 750 Taxable income $1,750 64. Dirk and Diane Davis are both employed solely by XYZ Corporation and each earned $15,000 in wages for 2013. With respect to the following items, what amount should be reported as income in addition to their wages?
65. On January 1, 2013, Peter Piper invested in two series HH bonds. Bond No. 1 was issued in the name of Peter and his son as co-owners. Bond No. 2 was issued in the name of Peter's son, although Peter was named as the sole beneficiary. In 2013, Bonds No. 1 and No. 2 paid interest of $2,000 and $1,000, respectively. What is the amount of interest income to be reported by Peter and by his son for 2013?
- Fall '14
- Dividends, Taxation in the United States