ACCT 553 Week 3 Homework ES

2029 WordsNov 23, 20149 Pages
These are the automatically computed results of your exam. Grades for essay questions, and comments from your instructor, are in the "Details" section below. Date Taken: 11/15/2014 Time Spent: 3 h , 17 min , 15 secs Points Received: 75 / 75 (100%) Question Type: # Of Questions: # Correct: Multiple Choice 8 8 Essay 2 N/A Grade Details - All Questions Question 1. Question : (TCO B) In which of the following situations may taxpayers file as married filing jointly? (Becker CPA Review Course) Student Answer: Taxpayers who were married but lived apart during the year. Taxpayers who were married but lived under a legal separation agreement at the end of the year. Taxpayers who were divorced during the year. Taxpayers…show more content…
Question : (TCO A) Which of the following does not constitute tax evasion? Student Answer: Arranging your affairs to keep your tax liability as low as possible under the tax law Trying to legitimately maximize profits Trying to legitimately minimize your tax liability All of the above Instructor Explanation: Chapter 1; Once a transaction is completed, it must be disclosed. Points Received: 5 of 5 Comments: Question 5. Question : (TCO C) Which of the following items is not subject to federal income tax? Student Answer: Interest on municipal bonds $5,000 birthday gift from a family member Discharge of debt through bankruptcy Life insurance proceeds All of the above Instructor Explanation: Chapter 5; IRC Secs. 101, 102, 103, & 108; All are excluded from gross income. Points Received: 5 of 5 Comments: Question 6. Question : (TCO B) Sam owes Bob $8,000. Bob cancels (forgives) the debt. The cancellation is not a gift, but Sam is insolvent. Which of the following statements is correct concerning the impact of this transaction? Student Answer: Both Bob and Sam recognize $8,000 of taxable income. Bob recognizes $8,000 of taxable income. Sam recognizes $8,000 of taxable income. Neither Bob nor Sam has any taxable income from this transaction. Instructor Explanation: Chapter 4; IRC Sec. 108; When a taxpayer's debt is forgiven, he recognizes income equal to the amount

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