b . Deb needed $ 10,000 to make a down payment on her house . She instructed her broker to sell some stock to raise the $ 10,000 . Deb ’ s cost of the stock was $ 3,000 . Based on her broker ’ s advice , instead of selling the stock , she borrowed the $ 10,000 using the stock as collateral for the debt .
c . Deb ’ s boss gave her two tickets to the Rabid Rabbits rock concert because she met her sales quota . At the time she received the tickets , each ticket had a face price of $ 200 and was selling on eBay for $ 300 . On the date of the concert , the tickets were selling for $ 250 each . Deb and her son attended the concert .
40 . LO . 3 Rusty has been experiencing serious financial problems . His annual salary was $ 100,000 , but a creditor garnished his salary for $ 20,000 ; so the employer paid the creditor ( rather than Rusty ) the $ 20,000 . To prevent creditors from attaching his investments , Rusty gave his investments to his 21-year-old daughter , Rebecca . Rebecca received $ 5,000 in dividends and interest from the investments during the year . Rusty transferred some cash to a Swiss bank account that paid him $ 6,000 interest during the year . Rusty did not withdraw the interest from the Swiss bank account . Rusty also hid some of his assets in his wholly owned corporation that received $ 150,000 rent income but had $ 160,000 in related expenses , including a $ 20,000 salary paid to Rusty . Rusty reasons that his gross income should be computed as follows :
53 . LO . 4 The LMN Partnership has a group term life insurance plan . Each partner has $ 150,000 of protection , and each employee has protection equal to twice his or her annual salary . Employee Alice ( age 32 ) has $ 90,000 of insurance under the plan , and partner Kay ( age 47 ) has $ 150,000 of coverage . Because the plan is a “ group plan ,” it is impossible to determine the cost of coverage for an individual employee or partner .
Chapter 5
5 . LO . 2 Dolly is a college student who works as a part-time server in a restaurant . Herusual tip is 20 % of the price of the meal . A customer ordered a piece of pie and said that he would appreciate prompt service . Dolly abided with the customer ’ s request . The