ACCT 553 STUDY Learn by Doing/acct553study.com ACCT 553 STUDY Learn by Doing/acct553study.com | Page 8

1. Your brother is short on cash and cannot pay his rent this month.
You pay his rent for him. Is this taxable income to your brother? Do
you get a deduction? (2 pts)
2. Which of the following items would be excluded from income? (a)
$100 bill found under the sugar caddy at the restaurant (b)
Inheritance of a car from your grandmother valued at $5,000. (c)
Loan from your father-in-law to start your business, (d) Child Support
received totaling $16,500. (4 pts)
Chapter 5
3. Shaun & Kayla earned the following in 2013: Interest on a Savings
account of $36, Interest on a U.S. Series EE Savings Bond of $25,
Interest on a CD that has not matured yet of $20. How much taxable
interest income must they report on their 2013 tax return? (4 pts)
4. Explain what a Cafeteria Plan is (hint: it has nothing to do with
what you eat between classes :-) ). (5 pts)
Chapter 6
5. Explain the limitations placed on the deductibility of Business
Gifts? What code section dictates this treatment? (5 pts)
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ACCT 553 Week 3 Homework ES (Quiz, Set 1)

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1. (TCO A) A taxpayer may litigate a tax dispute without first paying
the tax in the: