Question 1

Which of the following is not a necessary condition for income to be included in gross income?

Accepted Answer

A)  income must be realized
B)  income must be paid in cash
C)  income cannot be excluded by law
D)  income must be made available to a taxpayer on the cash basis
E)  All of theseF) A) and E)
G) A) and D)

Question 2

This year Barney purchased 500 shares of Bell common stock for $20 per share.At year-end the Bell shares were only worth $2 per share.What amount can Barney deduct as a loss this year?

Accepted Answer

A)  $10,000
B)  $9,000
C)  $1,000
D)  Barney can deduct $10,000 only if he includes $1,000 in his taxable income
E)  None of these - Barney is not entitled to a loss deduction.F) B) and C)
G) None of the above

Question 3

Jake sold his car for $2,400 in cash this year.He will realize a taxable gain of $1,000 if he purchased the car for $1,400.

Accepted Answer

A) True 
 B)False

Question 4

When an asset is sold,the taxpayer calculates the gain or loss by subtracting the tax basis of the asset from the proceeds of the sale.

Accepted Answer

A) True 
 B)False

Exam 5: Gross Income and Exclusions

Which of the following is not a necessary condition for income to be included in gross income?

Correct Answer
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When an asset is sold,the taxpayer calculates the gain or loss by subtracting the tax basis of the asset from the proceeds of the sale.

Correct Answer
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This year Barney purchased 500 shares of Bell common stock for $20 per share.At year-end the Bell shares were only worth $2 per share.What amount can Barney deduct as a loss this year?

Correct Answer
verified

Jake sold his car for $2,400 in cash this year.He will realize a taxable gain of $1,000 if he purchased the car for $1,400.

Correct Answer
verified

Exam 5: Gross Income and Exclusions

Which of the following is not a necessary condition for income to be included in gross income?

Correct AnswerverifiedShow Answer

When an asset is sold,the taxpayer calculates the gain or loss by subtracting the tax basis of the asset from the proceeds of the sale.

Correct AnswerverifiedShow Answer

This year Barney purchased 500 shares of Bell common stock for $20 per share.At year-end the Bell shares were only worth $2 per share.What amount can Barney deduct as a loss this year?

Correct AnswerverifiedShow Answer

Jake sold his car for $2,400 in cash this year.He will realize a taxable gain of $1,000 if he purchased the car for $1,400.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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