1. Tim earns a salary of $40,000. This year, Tim's employer establishes a cafeteria plan under which Tim signed a salary reduction of $2,500 for which $1,500 is to cover his health insurance premiums and $1,000 is available to reimburse medical expenses. During the year, he is reimbursed $900 for medical expenses. What is the total taxable to Tim this year?
A) $37,500 B) $38,400 C) $40,000 D) $37,600
2. For 2013, the maximum foreign-earned income exclusion is
A) $97,600. B) $95,100. C) $92,900. D) $91,500.
3. The discharge of certain student loans is excluded from income if all of the following are present except for
A) the loan proceeds must have been used to pay the cost of attending an education institution or used to refinance outstanding student loans.
B) the loan forgiveness must be contingent upon the individual's working for a specified period of time in certain professions.
C) the loan must have been made by governmental, educational, or charitable organizations.
D) the loan forgiveness is based on age.
4. Arthur pays tax of $5,000 on taxable income of $50,000 while taxpayer Barbara pays tax of $12,000 on $120,000. The tax is a
A) proportional tax. B) progressive tax.
C) regressive tax. D) None of the above.
5. Which of the following taxes is progressive?
A) sales tax B) income tax C) property tax D) excise tax
6. Steve Greene is divorced, age 66, has good eyesight, and lives alone. He claims his son Dylan, who is blind, as his dependent. In 2013 Steve had income and expenses as follows:
Gross income from salary $80,000
Total itemized deductions 5,500
A) $63,100. B) $64,600.
C) $60,700. D) $59,200.
7. In September of 2013, Michelle sold shares of qualified small business stock for $1,000,000 that had a basis of $200,000. She had held the stock for 7 months. Forty-five days after the sale she purchased other qualified small business stock for $1,100,000. How much of the gain will she recognize?
A) $100,000 B) $900,000 C) $800,000 D) $ -0-
1. Arthur pays tax of $5,000 on taxable income of $50,000