Question :
41. Mary received the following items during 2014:
Christmas bonus from her : 1313497
41. Mary received the following items during 2014:
Christmas bonus from her employer$500
Christmas gift from her father$ 35
Prize won in a radio show contest$100
What is the total amount of the above items that must be included in Mary’s 2014 gross income?
a. $0
b. $100
c. $500
d. $600
e. $635
42. As a Christmas thank you for being a good employee, Ed’s TV Repair gave 62-year-old Edwina three shares of its stock worth $20 per share. Edwina then received dividends of $1 per share related to the stock. How much should be included in Edwina’s gross income?
a. $0
b. $3
c. $60
d. $63
e. None of the above
43. Which of the following is nontaxable income to the recipient for tax purposes?
a. Salary income
b. Income from real estate rental property
c. Income from tips
d. Inheritances
e. None of the above
44. In 2014, Uriah received the following interest payments:
?
Interest of $400 on an overpayment of 2013 Federal income taxes
Interest of $300 from his bank certificate of deposit.
Interest of $1,500 on municipal bonds
Interest of $1,000 on United States savings bonds (Series HH)
?
What amount, if any, should Uriah report as taxable interest income on his 2014 individual income tax return?
a. $0
b. $700
c. $1,700
d. $3,200
e. None of the above
45. Elmer received the following distributions from Virginiana Mutual Fund for the calendar year 2014:
Ordinary dividends$250
Capital gain distributions$170
Nontaxable distributions$ 80
Elsie, Elmer’s wife, did not own any of the Virginiana Mutual Fund shares, but she did receive $175 in interest on a savings account at the Moss National Bank and $1,475 in interest on California Municipal Bonds. Elmer and Elsie filed a joint income tax return for 2014. What amount is reportable as taxable interest income?
a. $0
b. $175
c. $1,475
d. $1,650
e. None of the above
46. Elsie received the following distributions from Virginiana Mutual Fund for the calendar year 2014:
Ordinary dividends (nonqualifying)$250
Capital gain distributions$170
Nontaxable distributions$ 80
Elmer, Elsie’s husband, did not own any of the Virginiana Mutual Fund shares, but he did receive $1,600 in interest on a savings account at the Moss National Bank. Elmer and Elsie filed a joint income tax return for 2014. What portion of the distributions from Virginiana Mutual Fund is taxable as ordinary income on their 2014 individual income tax return?
a. $0
b. $250
c. $420
d. $500
e. None of the above
47. Tim receives $500 of qualified dividends from Exxon in 2014. He is in the 10 percent ordinary tax bracket. Tim’s tax on the dividends will be:
a. $0
b. $25
c. $50
d. $75
e. $100
48. Arthur, age 19, is a full-time student at Gordon College and is a candidate for a bachelor’s degree. During 2014, he received the following amounts:
Tuition scholarship$2,400
Loan from college financial aid office$1,000
Cash support from parents$2,000
Ordinary cash dividend$ 500
Cash prize awarded in contest$ 300
What is his adjusted gross income for 2014?
a. $300
b. $500
c. $800
d. $2,800
e. None of the above
49. Laura and Leon were granted a divorce in 2005. In accordance with the decree, Leon made the following payments to Laura in 2014:
Child support payments contingent on the age of the child$4,000
Indefinite periodic payments terminating on Laura’s death$6,000
How much of the payments can he deduct as alimony in 2014?
a. $0
b. $6,000
c. $10,000
d. $4,000
e. None of the above
50. Jerry and Sally were divorced under an agreement executed July 1, 2014. The terms of the agreement provide that Jerry will transfer to Sally his interest in a rental house worth $250,000 with a tax basis to Jerry of $80,000. What is the amount of the gain that must be recognized by Jerry on the transfer of the property and what is Sally’s tax basis in the property after the transfer, respectively?
a. $170,000 and $250,000
b. $0 and $250,000
c. $170,000 and $170,000
d. $0 and $80,000
e. None of the above
