Neither Bob nor Sam has any taxable income from this transaction. 4. Jane purchased an annuity contract that pays her $ 800 per month. The annuity cost her $ 50,000 and it has an expected return of $ 100,000. How much of each monthly annuity payment is includible in Jane ' s gross income?
5. Which of the following is not considered " constructive receipt " of income?
Mr. W received a check on December 30, 2009 for services rendered, but was unable to make a deposit until January 3, 2010. 6. Stan and Anne were divorced in January 2009. The provisions of the divorce decree and Anne ' s obligations follow:( 1.) Transfer the title in their resort condo to Stan. At the time of the transfer, the condo had a basis to Anne of $ 75,000, a fair market value of $ 95,000; it was subject to a mortgage of $ 65,000.( 2.) Anne is to make the mortgage payments for 17 years regardless of how long Stan lives. Anne paid $ 8,000 in 2009.( 3.) Anne is to pay Stan $ 1,000 per month, beginning in February, for 10 years or until Stan dies. Of this amount, $ 300 is designated as child support. Anne made five payments of $ 900 each in 2009( February-June). What is the amount of alimony from his settlement that is includible in Stan ' s gross income for 2009?
7. To be deductible for tax purposes, a trade or business expenditure must be:
8. Mr. Wilson is 66 years old and single. His income for 2009 consisted of the following: Taxable pension $ 10,000 Taxable interest 9,000 Taxable dividends 5,000 Social security payments 5,000 He did not have any adjustments to income. What amount of W ' s social security benefits is taxable?
9. Explain the Assignment of Income Doctrine( AID) and the " fruitof-the-tree " doctrine.
10. Explain the Constructive Receipt Doctrine.