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Tax and Gross Income

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Tax and Gross Income
TEST 1
Correct Response
Indicate whether each of the items listed below would be included (A) in or excluded (B) from gross income for the 2012 tax year. 1. Alimony | | 2. Lottery winnings | | 3. Life insurance proceeds received upon the death of a family member | | 4. Child support payments | | 5. Reimbursement of hospital expenses from a health insurance plan | | 6. Municipal bond interest | | 7. Unemployment compensation | | 8. Scholarships for tuition and books | | 9. Wages | | 10. Farm income | | 11. Inheritances | |
Which of the following amounts must be included in the gross income of the recipient? a. Welfare payments | | | b. Royalties | | | c. Child support payments | | | d. Gifts | | | e. All of these choices are included in gross income. | | |
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Which of the following is classified as nontaxable income? a. Welfare payments | | | b. Income from real estate rental property | | | c. Unemployment compensation | | | d. Dividend income | | | e. None of these choices are correct. | |
In the tax law, the definition of gross income is: a. all income from whatever source derived. | | | b. all cash payments received unless excluded by the tax code. | | | c. all income of any kind unless the income is earned illegally. | | | d. all cash payments received for services performed. | |
All of the following amounts are taxable income to the recipient except: a. farm income. | | | b. prizes. | | | c. salaries. | | | d. unemployment compensation. | | | e. gifts. | |
Which of the following is nontaxable income to the recipient for tax purposes? a. Income from tips | | | b. Inheritances | | | c. Salary income | | | d. Income from real estate rental property | | | e. None of these choices are correct. | |
Elmer received the following distributions from Virginiana Mutual Fund for the calendar year 2012:

Elsie, Elmer's wife, did not own any

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