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1) Gross income includes all of the following except A) salary

Question : 1) Gross income includes all of the following except A) salary : 1981145

1) Gross income includes all of the following except

A) salary or wages.

B) interest or dividends received.

C) employer's current contribution to 401(k).

D) capital gains realized.

2) Which of the following gross income is not taxable income?

A) Health insurance reimbursements

B) Interest income

C) Dividends

D) Tips received

3) All of the following are types of nontaxable income except

A) child support payments.

B) casualty insurance reimbursements.

C) rental income.

D) reimbursements of moving expenses by an employer.

4) Interest income would come from earnings on

A) stocks.

B) savings accounts.

C) capital gains on investments.

D) sale of mutual funds.

5) Income earned from the sale of an asset for more than you paid for it is classified as a(n)

A) dividend income.

B) interest income.

C) capital gain.

D) windfall.

6) If you were to receive $100,000 from a corporation, the most tax-efficient way to receive it would be as

A) dividends.

B) interest.

C) capital gains.

D) salary.

7) If a stock was purchased in January 2009 for $1,000 and sold in December 2010 for $3,000, a ________ of $2,000 results.

A) long-term capital gain

B) short-term capital gain

C) long-term capital loss

D) short-term capital loss

8) If a stock was purchased for $5,000 in January 2010 and is sold in December 2010 for $3,000, a ________ of $2,000 results.

A) long-term capital gain

B) short-term capital gain

C) long-term capital loss

D) short-term capital loss

9) If you own stock that has increased in price, it would be best to sell it after you have owned it for at least

A) 6 months and one day.

B) 12 months and one day.

C) 18 months and one day.

D) 24 months and one day.

10) Gross income and adjusted gross income can be the same if you do not have any special adjustments. Which of the following is not one of these special adjustments?

A) Capital gains are deducted and capital losses are added

B) IRA contributions are subtracted from gross income

C) Interest and dividend income is part of the income calculation

D) Alimony payments are deducted from gross income

11) Jake invested $800 in an IRA. If he has a 15 percent marginal tax rate and the contribution is tax deductible, Jake will

A) pay $120 more in taxes.

B) pay $120 less in taxes.

C) receive no change to his tax liability.

D) have $800 more in adjusted gross income.

12) For qualified individuals, a contribution to a traditional IRA (Individual Retirement Account) is a(n)

A) credit.

B) adjustment to gross income.

C) itemized expense.

D) additional exemption amount.

13) Reductions of gross income for such items as individual retirement accounts (IRAs), moving expenses, and student loan interest payments will result in

A) adjusted gross income.

B) taxable income.

C) earned income.

D) passive income.

Solution
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