Question

Sally is 92 years old and single and claimed by her daughter as a dependent. During the tax year she received $1,900 in interest from her savings account, $1,500 in interest from State of New York general obligation bonds, and $8,000 distributions from a Roth IRA. What is her AGI?

$1,500

$1,900

$3,400

$11,400

2) Cranky, age 70, is single and an employee of Unknown Corporation. Her only sources of income in 2017 $80,000 of W-2 wages, $5,100 in alimony payments, and a $1,000 cash gift from her brother. Based on the above, Cranky’s adjusted gross income for the current year is:

$80,000

$81,000

$83,000

$85,100

3) In October of 2017 Bruce, a cash basis CPA, contracted to perform an audit for $2,000 and to prepare the corporate tax return for $1,000. The contract called for payment January 31 of 2018. The client offered Bruce $1,500 on December 31, 2017. Bruce refused citing the contract payment date. What amount must Bruce include in his 2017 tax return?

$0

$1,000

$1,500

$3,000

4) In October of 2017 Bruce, a cash basis CPA, contracted to perform an audit for $2,000 and to prepare the corporate tax return for $1,000. The contract called for payment January 31 of 2018. The client called Bruce on December 31, 2017, and offered him $1,500. Bruce accepted and the client mailed him a check on December 31, 2017. What amount must Bruce include in his 2017 tax return?

$1,000

$0

$1,500

$3,000

5) Bonnie, a widow, elected to receive the proceeds of a $100,000 face value insurance policy on the life of her deceased husband in ten annual installments of $11,900 each including interest (beginning last year). In the current year, she received $11,900, which included $1,900 interest. Bonnie dies in December of the current year after collecting the current year’s payment. What is the amount subject to income tax on her final tax return?

$0

$1,900

$5,000

$6,900

Answer 1

As per policy only first four questions will be answered.

1. Answer is option C $3,400 (1500+1900)

A Roth Individual Retirement Arrangement contribution has no effect on your AGI, but a Roth IRA withdrawal may have an impact on your AGI.

2. Answer is option D $85,100 (80000+5100)

Cash gifts are excluded.

3. Answer is option A

Bruce does not need to include any amount in his 2017 tax return as he has not received any payment in 2017

4. Answer is option C $1500

Check of 1500 has been received on the last date of 2017 which will be included in 2017.