Question

14. Ron, age 19, is a full-time graduate student at City University. During 2019, he received the following payments:

Cash award for being the outstanding resident adviser $ 1,500

Resident adviser housing 2,500

State scholarship for ten months (tuition and books) 6,000

State scholarship (meals allowance) 2,400

Loan from college financial aid office 3,000

Cash support from parents    2,000

Total                                             $17,400

Ron served as a resident adviser in a dormitory and, therefore, the university waived the $2,500 charge for the room he occupied. What is Ron’s adjusted gross income for 2019?

a. $1,500.

b. $3,900.

c. $9,000.

d. $15,400.

e. None of these.

15. A scholarship recipient at State University may exclude from gross income the scholarship proceeds used to pay for:

a. Tuition only.

b. Tuition, books, and supplies.

c. Tuition, books, supplies, meals, and lodging.

d. Meals and lodging.

e. None of these.

16. Which of the following items, if any, is deductible?

a. Parking expenses incurred in connection with jury duty—taxpayer is a dentist.

b. Substantiated gambling losses (not in excess of gambling winnings) from state lottery.

c. Contributions to mayor’s reelection campaign.

d. Speeding ticket incurred while on business.

e. Premiums paid on personal life insurance policy.

Answer 1

14.

a) $1,500

A measure of income used to determine how much of your income is taxable. Adjusted gross income (AGI) is calculated as your gross income from taxable sources minus allowable deductions,

Such as unreimbursed business expenses, medical expenses, and Alimony and deductible retirement plan contributions.

Your AGI is figured federal tax return, and it is used to establish eligibility for financial benefits such as IRA contribution deduction limits and social security benefits.

The $1500 cash award is included in Ron gross income the $2,500 waiver for housing is not included in Rons gross income coz the housing is provided for the convenience of his employer the scholarship is excluded from his gross income.

15. A scholarship recipient at State University may exclude from gross income the scholarship proceeds used to pay for:

Answer: b. Tuition, books, and supplies.

16. Which of the following items, if any, is deductible?

Answer : b. Substantiated gambling losses (not in excess of gambling winnings) from state lottery.