14. A taxpayer was in an automobile accident while he was going to work. He was in a rehabilitation facility for ten months re-learning how to walk. The resulting lawsuit was settled, and he received the following amounts for: medical expenses lost wages emotional distress due to injuries punitive damages O $500,000 500,000 How much of the settlement must he include in gross income on his tax return? O $25,000 O $575,000 $ 120,000 75,000 O $0 25,000

14. A taxpayer was in an automobile accident while he was going to work. He was in a rehabilitation facility for ten months re-learning how to walk. The resulting lawsuit was settled, and he received the following amounts for: medical expenses lost wages emotional distress due to injuries punitive damages O $500,000 500,000 How much of the settlement must he include in gross income on his tax return? O $25,000 O $575,000 $ 120,000 75,000 O $0 25,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Oswald, while walking down the street, is hit by a reckless driver. Oswald sues the driver and recovers the following damages: $20,000 to reimburse Johnny for medical expenses previously incurred (but not previously deducted), $10,000 for pain and suffering, $5,000 for emotional distress stemming from the accident, and $2,500 in punitive damages How much of Oswald's recovery is included in gross income?
! Required information [The following information applies to the questions displayed below.] What amounts are included in gross income for the following taxpayers? Note: Leave no answers blank. Enter zero if applicable. c. Ajax published a story about Pete, and as a result Pete sued Ajax for damage to his reputation. Ajax lost in court and paid Pete an award of $20,000. Amount included in Gross Income
17. Noah gave $750 to a good friend whose house was destroyed by an earthquake. In addition, Noah contributed his time, valued at $250, in the cleanup effort. What’s amount of charitable deduction may Noah claim on his tax return for the current year, if his AGI is $80,000.
During the tax year, Monica incurred one personal casualty loss due to a federally declared disaster. The amount of the loss after reimbursements is $8,025. Monica will not be replacing any of the damaged property. Monica's adjusted gross income is $50,000. What is the amount of the casualty loss deduction to report on Schedule A (Form 1040)? $2,925 $3,025 $7,925 $8,025
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The nephew of a well-known artist gave a costly artwork to an individual taxpayer. After two years, the taxpayer sold the artwork for a $400,000 profit. Long-term financial gains are what you'll be getting out of this.True \False
The following pertains to Ana, a resident citizen taxpayer: Fruits harvested to be sold at a later date 30,000 Interest on bank deposits 1,000 Dividends declared by ABC Company 3,000 Increase in the market value of lot 10,000 Gambling winnings 9,000 Gain on sale of goods by branch office 5,000 Income on goods delivered by home office to branch office for sale by the latter 4,000 Indemnity received for moral damages claimed 50,000 Ana’s employer cancelled her (Ana) first debt upon her request 5,000 Ana’s employer offset Ana’s second debt against her salary 4,000 69. Compute the total gross income of Ana. A. 22,000 B. 23,000 C. 58,000 D. 103,000
Last year, lana purchased a $100,000 account receivable for $90,000. During the current year, Lucy collected $97,000 on the account. What are the tax consequences to Lucy associated with the collection of the account receivable? No subsequent collections are expected. a.$7,000 gain b.$3,000 loss c.$13,000 loss d.$2,000 gain
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de 31. Which of the listed individuals will qualify as a dependent of Taxpayer? OJOL A A twenty-six year old son who earned $5,100 between January 1 and March 17, but was unemployed for the remainder of the year B E C D A seven year old niece supported by Taxpayer, but who lived with Taxpayer's parents all year The five year old son of Taxpayer's best friend who lived with Taxpayer all year while the child's parents were in prison Taxpayer's twenty-one year old married daughter who was supported by Taxpayer, but who filed a joint return with her husband. Assume that the daughter earned $14,000 of income and the joint return reported a $400 income tax liability. None of the above