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2. Which of the following items is not subject to federal income tax?
3. Sam owes Bob $8,000. Bob cancels (forgives) the debt. The
cancellation is not a gift and Sam is neither insolvent nor bankrupt.
Which of the following statements is correct concerning the impact of
this transaction?
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?