Questions from General Taxation


Q: Which of the following items are exclusions from gross income?

Which of the following items are exclusions from gross income? a. Alimony payments received. b. Damages award received by the taxpayer for personal physical injury—none were for punitive damages. c...

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Q: Caden and Lily are divorced on March 3, 2014. For

Caden and Lily are divorced on March 3, 2014. For financial reasons, how- ever, Lily continues to live in Caden’s apartment and receives her support from him. Caden does not claim Lily as a dependent...

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Q: Wesley and Myrtle (ages 90 and 88, respectively) live

Wesley and Myrtle (ages 90 and 88, respectively) live in an assisted care facility and for 2014 and 2015 received their support from the following sources: a. Which persons are eligible to claim the d...

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Q: Sam Jones owns a granite stone quarry. When he acquired the

Sam Jones owns a granite stone quarry. When he acquired the land, Sam allocated $800,000 of the purchase price to the quarry’s recoverable mineral reserves, which were estimated at 10 million tons of...

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Q: Duck, an accrual basis corporation, sponsored a rock concert on

Duck, an accrual basis corporation, sponsored a rock concert on December 29, 2015. Gross receipts were $300,000. The following expenses were incurred and paid as indicated: Because the coliseum was...

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Q: Ted, an agent for Waxwing Corporation, which is an airline

Ted, an agent for Waxwing Corporation, which is an airline manufacturer, is negotiating a sale with a representative of the U.S. government and with a representative of a developing country. Waxwing h...

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Q: Linda operates an illegal gambling operation and incurs the following expenses.

Linda operates an illegal gambling operation and incurs the following expenses. Which of these expenses can reduce her taxable income? a. Bribes paid to city employees. b. Salaries to employees. c. S...

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Q: Grady exchanges qualified property, basis of $12,000 and

Grady exchanges qualified property, basis of $12,000 and fair market value of $18,000, for 60% of the stock of Eadie Corporation. The other 40% of the stock is owned by Pedro, who acquired it five yea...

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Q: Cardinal Corporation is a trucking firm that operates in the Mid-

Cardinal Corporation is a trucking firm that operates in the Mid-Atlantic states. One of Cardinal’s major customers frequently ships goods between Charlotte and Baltimore. Occasionally, the customer s...

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Q: Melissa, the owner of a sole proprietorship, does not provide

Melissa, the owner of a sole proprietorship, does not provide health insurance for her 20 employees. She plans to spend $1,500 lobbying in opposition to legislation that would require her to provide s...

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