Filberts employer has a qualified pension plan to

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Question 7 (5 points) Filbert's employer has a qualified pension plan to which it contributes 6% of his gross salary. Filbert's current annual salary is $50,000. The pension plan also earns $2,500 during the current year on contributions made to the plan on behalf of Filbert. What is Filbert's gross income from these transactions for the current year? Student response: Correct Response Student Response Answer Choices x a. $50,000 b. $52,500 c. $53,000 d. $55,500 Question 8 (5 points) Harrison is a waiter at Trucker's Delight Restaurant. He eats two meals each day at the restaurant at no charge. One is eaten just before he begins work; the other is eaten during working hours. The value of meals consumed by Harrison during the current year is $2,500, evenly distributed between the two meals. What factors permit Harrison to exclude the value of the meals from gross income? I-Harrison will have to recognize $1,250 of income. II-The provision of the meals is for the convenience of the employer. III-Harrison may receive his choice of either a small cash meal allowance or the value of any two meals. Student response: Correct Response Student Response Answer Choices
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Question 9 (5 points) Browne's employer has a qualified pension plan that allows employees to contribute up to 10% of their gross salaries to the plan. The employer matches the contribution at the rate of 50% of the employee's contribution. Browne's current annual salary is $40,000. This is his only source of income. If he contributes the maximum amount to the pension plan, what is Browne's gross income for the current year? Student response: Correct Response Student Response Answer Choices Question 10 (5 points) Ward and June are in the 28% tax bracket. Included in their assets is a Dell Corporation bond with a face value of $10,000. The bond pays $1,000 a year in interest. Ward and June are considering making a gift to their son, Wally (age 18). In the current year, they give Wally the $1,000 in interest income. Wally is in the 10% tax bracket. What is Ward and June's tax liability related to the bond and the bond interest for the current year? Student response: Correct Response Student Response Answer Choices
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Question 11 (5 points) Bart's spouse, Carla, dies during the current year. Carla's life insurance policy names Bart the sole beneficiary of the $2 million proceeds. Bart invests the $2 million in a bank certificate of deposit (CD). For the current year, Bart earns $98,000 interest from the CD. What are the tax effects of these events for Bart? I-The $98,000 is included in gross income. II-The $2 million is included in gross income. Student response: Correct Response Student Response Answer Choices a. Only I is correct. b. Only II is correct. c. Both are correct. d. Neither is correct. ANS:APTS:1
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Christopher Reinemann
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