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California State University, Los Angeles *

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3210

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Accounting

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Feb 20, 2024

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pdf

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Uploaded by PrivateNeutron5338

On December 1, 2021, Daniel, an accrual basis taxpayer, collects $12,000 rent for December 2021 and $12,000 for January 2022. Daniel must include the $24,000 in 2021 gross income. True Ted earned $150,000 during the current year. He paid Alice, his former wife, $75,000 in alimony. The couple divorced in 2017. Under these facts, the tax is paid by the person who benefits from the income rather than the person who earned the income. True Paula transfers stock to her former spouse, Antonio. The transfer is pursuant to a divorce agreement. Paula's cost of the stock was $75,000 and its fair market value on the date of the transfer is $95,000. Paula must recognize a $20,000 gain on the transfer. False Terri purchased an annuity for $100,000. She was to receive $10,000 per year and her life expectancy was 20 years. She died after receiving eight payments. Terri's final return should reflect a loss of $20,000 ($100,000 – $80,000). False If a lottery prize winner transfers the prize to a qualified government unit or nonprofit organization, then the prize is excluded from the winner's gross income if the amount of the prize does not exceed 30% of the winner's AGI. False

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