Tiffany and Carlos are married and have two children, Mikey is 13 years old and Susie is 25. Both children are unmarried and live at home with their parents. Tiffany and Carlos provide over half of the support costs of both children. During the year, Mikey earned $3,000 at a local fast-food restaurant. Susie earned $3,700 as a part-time bookkeeper. Which of the following is TRUE? (Assume a $4,300 limit for the gross income test). Susie will qualify her parents for the $500 family credit.. Mikey will qualify his parents for a $3,600 credit because he is under 15 years old. Susie will qualify her parents for the full $3,000 credit. Susie will not qualify her parents for any credit.
Tiffany and Carlos are married and have two children, Mikey is 13 years old and Susie is 25. Both children are unmarried and live at home with their parents. Tiffany and Carlos provide over half of the support costs of both children. During the year, Mikey earned $3,000 at a local fast-food restaurant. Susie earned $3,700 as a part-time bookkeeper. Which of the following is TRUE? (Assume a $4,300 limit for the gross income test). Susie will qualify her parents for the $500 family credit.. Mikey will qualify his parents for a $3,600 credit because he is under 15 years old. Susie will qualify her parents for the full $3,000 credit. Susie will not qualify her parents for any credit.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Tiffany and Carlos are married and have two children, Mikey is 13 years old and Susie is 25. Both children are unmarried and live at home with their parents. Tiffany and Carlos provide over half of the support costs of both children. During the year, Mikey earned $3,000 at a local fast-food restaurant. Susie earned $3,700 as a part-time bookkeeper. Which of the following is TRUE? (Assume a $4,300 limit for the gross income test).
Susie will qualify her parents for the $500 family credit..
Mikey will qualify his parents for a $3,600 credit because he is under 15 years old.
Susie will qualify her parents for the full $3,000 credit.
Susie will not qualify her parents for any credit.
John is a local freelance photographer. Which one of the following should be included in his Gross Income?
Group of answer choices
John wins $1,000,000 in compensatory damages after suing Bill for a physical injury caused by Bill.
John owns shares in X-Corp. X-Corp declares a 2-for-1 stock dividend during the year.
John’s employer contributes $6,500 into a qualified pension plan on his behalf.
$20,000 in Pre-Tax Cuts & Jobs Act alimony received.
On February 2021, Rebecca applies is nominated by a third party for the prestigious American Liberty Prize. In July 2021, she wins the prize for her scientific lab work which has led to a cure for a particular type of cancer. The award comes with a $2,000,000 cash prize that Rebecca then donates the funds to a charity for cancer patients. Rebecca is required to attend monthly publicity events for the American Liberty Prize Foundation for the next 3 years as a condition for keeping her award. Is Rebecca required to include the cash award in Gross Income?
Group of answer choices
Yes, because she nominated herself for the award.
Yes, because she is required to provide future services..
No, because the award was a literary award and she gave the money away.
No, because literary, charitable, and scientific awards are automatically excluded for Federal Income Tax purposes.
[Chapter 3: Topic #3]
Jessica is a professional consultant. She agrees to consulting services for Joe for $2,000. After she finishes, Joe does not have cash to pay Jessica, but he has an antique, collectible baseball card with a fair market value of $2,000 that he gives her to satisfy the payment. The baseball card cost Joe $500. How much should Jessica include in her gross income?
Group of answer choices
$0
$2,000
$8,000
$10,000
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