Tax Knowledge Challenge

The Clarks have a 21-year-old son, Alex, who is a full-time student at the state university. Alex received $10,000 in scholarships this year for academ achievement. He also works part time at the university bookstore and earned $5,400 this year. Alex's grandparents paid $7,000 to support Alex this year. Alex was home with his parents for two months in the summer and at school for the rest of the year. Alex used the scholarship, the earnings from the part-time job, and the money from his grandparents as his only source of support this year. Which of the following definitions does Alex meet for the Clarks?

Mosh, a sole proprietor, uses the cash basis of accounting. At the beginning of the current year, accounts receivable were $25,000. During the year, Mosh collected $100,000 from customers. At the end of the year, accounts receivable were $15,000. What was Mosh's gross taxable income for the current year?

With regard to S corporations and their stockholders, the "at risk" rules applicable to losses:

Under the uniform capitalization rules applicable to taxpayers with property acquired for resale, which of the following costs should be capitalized with respect to inventory if no exceptions have been met? (1) Repackaging costs (2) Off-site storage costs

With regard to the inclusion of social security benefits in gross income, for the Year 8 tax year, which of the following statements is correct?

Which of the following items must be separately stated on Form 1120S, U.S. Income Tax Return for an S Corporation, Schedule K-1?

Which of the following may not be deducted in the computation of alternative minimum taxable income of an individual?

Spencer, who itemizes deductions, had adjusted gross income of $60,000 for the current year. The following additional information is available for the year. Cash contribution to church $4,000 Purchase of art object at church bazaar (with a fair market value of $800 on the date of purchase) $1,200 Donation of used clothing to Salvation Army (fair value evidenced by receipt received) $600 What is the maximum amount Spencer can claim as a deduction for charitable contributions in the current year?

Poole is 45 years old and unmarried. Assume that he is subject to a 15% tax bracket. He had adjusted gross income of $30,000. The following information applies to Poole: Medical expenses $ 15,250 Standard deduction 12,000 Poole wishes to minimize his income tax. What is Poole's total income tax?

For the current year, Val and Pat White filed a joint return. Val earned $40,000 in wages and was covered by his employer's qualified pension plan. Pat was unemployed and received $5,000 in alimony payments (from a divorce agreement executed in 2017) for the first four months of the year before remarrying. The couple had no other income. Each contributed $5,000 to a traditional IRA account. The allowable IRA deduction on their current year joint income tax return is: