Q1 What is the amount that Mike must include in gross income for the current year if…Early in the year, Mike was in an automobile accident during the course of his employment. As a result of the injuries he sustained, he received the following payments during the year: Worker’s compensation benefit $4,000 Reimbursement of medical expenses from the company’s group medical nsurance plan $6,000 Regular salary under the company’s sick pay plan $5,000
1. $15,000. 2. $11,000. 3. $9,000. 4. $5,000. 5. None of the above.
0% 0% 0% 0%
None of the above.
$15,000.00 $11,000.00 $9,000.00
Q2) A scholarship recipient at UH must include in gross income the scholarship proceeds used to pay for:
Only tuition. Tuition, books, and supplies, but not meals and lodging. Books, supplies, meals, and lodging. Meals and lodging. None of the above.
tu iti nl y O oo
0% 0% 0% 0% 0%
on . . in g lo dg of th e ... ab ov ... m ea e.
s, pp lie s
Q3 The Red Tire Company had such a good year that the owner decided to give all of the employees a $500 Christmas bonus. None of the employees had expected to receive the bonus. The employees may exclude the $500 from gross income as a gift.
Q4 Zack was the beneficiary of a life insurance policy on his wife. Zack had paid $20,000 in premiums on the policy. He collected $50,000 upon the death of his wife. He used the insurance proceeds to purchase a United States Government bond, which paid him $2,000 interest income during the year. Zack is not required to recognize any income from any of the above transactions.
1. True 2. False
Fa ls e
Q5 Ted cashed in his life insurance policy when he found out he had a terminal illness. He had paid $15,000 in premiums and collected $50,000 from the insurance company. Ted is not required to include any of the proceeds in gross income.
1. True 2. False