received during the year advance rents included Security deposits are not

Received during the year advance rents included

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received during the year, advance rents included. Security deposits are not includible in income if they do not apply toward rent. The transfer of property does not create any taxable income. Bob receives a tax deduction for alimony 84. paid, and Alice receives income for the $2,000 per month. Child support is not tax deductible, nor is it includible in Alice’s income. Since the decree is silent on which spouse will take the tax deduction for the children, Alice, the custodial parent, is entitled to the deduction for both children. (a.) The Ryans do not have to report any of the $8,000 in life insurance proceeds on their 2010 return 85. because life insurance proceeds are excluded from gross income. (b.) The Ryans should report $400 in interest income for 2010. Both the interest on the life insurance policy’s accumulated dividends and interest on the income tax refund are included in gross income. (a.) Zelda must include $75 in interest as taxable income. Both the interest on the insurance dividends left 86. on deposit with North American and the interest on the state income tax refund are taxable. (b.) The $875 dividend from the U.S. corporation received on January 2, 2010, is included in 2010 income. (c.) “Other Income” includes the $2,400.
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441 Testbank © 2010 CCH. All Rights Reserved. Chapter 4 DIFFICULTY LEVEL RATINGS—CHAPTER 4 The following table denotes the relative dif fi culty level of each question. Teachers may wish to organize test questions based on the dif fi culty level of the particular class. True-False Question Ratings Easy 1. Easy 2. Moderate 3. Easy 4. Easy 5. Moderate 6. Moderate 7. Easy 8. Easy 9. Easy 10. Moderate 11. Moderate 12. Moderate 13. Easy 14. Moderate 15. Easy 16. Moderate 17. Moderate 18. Easy 19. Easy 20. Easy 21. Easy 22. Moderate 23. Moderate 24. Moderate 25. Moderate 26. Moderate 27. Moderate 28. Moderate 29. Easy 30. Easy 31. Easy 32. Moderate 33. Easy 34. Easy 35. Moderate 36. Moderate 37. Easy 38. Easy 39. Multiple Choice Question Ratings Moderate 40. Moderate 41. Moderate 42. Easy 43. Easy 44. Moderate 45. Moderate 46. Moderate 47. Moderate 48. Moderate 49. Moderate 50. Moderate 51. Moderate 52. Dif fi cult 53. Moderate 54. Moderate 55. Moderate 56. Dif fi cult 57. Dif fi cult 58. Moderate 59. Moderate 60. Moderate 61. Moderate 62. Moderate 63. Moderate 64. Moderate 65. Moderate 66. Moderate 67. Easy 68. Easy 69. Easy 70. Easy 71. Moderate 72. Moderate 73. Moderate 74. Moderate 75. Easy 76. Easy 77. Easy 78. Moderate 79.
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442 CCH Federal Taxation—Basic Principles Chapter 4 © 2010 CCH. All Rights Reserved. Supplementary Problem Ratings Moderate 80. Easy 81. Easy 82. Easy 83. Easy 84. Moderate 85. Moderate 86.
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