Question

Review the following independent scenarios (Click the icon to view the information.) Requirement What amount, if any, must be included in gross income by the taxpayers? a. Ann received $2,000 from her insurance company when her automobile which cost $3,000 was stolen. A. The amount received from her insurance company, $2,000, should be included in Ann's gross income. B. None. The amount is not deductible by the insurance company, thus, should not be included in Ann's gross income. C. None. The amount received is a recovery of capital. D. Only half of the amount received from the insurance company should be included in Ann's gross income. b. Barry received $3,000 from his brother. Barry had initiated a lawsuit against his brother in an effort to recover $3,000 he had previously loaned to him. The brother paid Barry back before the case was tried, and Barry dropped the lawsuit. O A. The repayment of $3,000 should be included in Barry's gross income because the payment was received. B. The repayment of $3,000 should be included in Barry's gross income because the transaction is considered a related party transaction. C. None. The repayment of $3,000 does not have to be included in Barry's gross income because he dropped the lawsuit. D. None. The repayment of a loan is nontaxable. The fact that the taxpayer had to initiate a lawsuit is irrelevant.

Answer 1

Answer :- Pinoil As por | the information about the amount , if any must be included in gross income by the tax payexs...... The amount received $2,000 is part of recovery of Capital $3,000. Thus, none of the amount received should be included in groll income. A loan repayment will not be taxed. It does not matter whether the taxpayer initiated a lawsuit. Thus, amount should none of the be included in gross income. c) an accounting fee will be taxed. It does not matter whether the taxpayer Sued. If a taxpayer is on the Cash basis, then the tax payer should report the fee when the fee is collected. If a taxpaya is on the accrual basis should report the fee when the Services are performed

not written op og P.2 If the fee was a bad deft, then a taxpayer on the accrual basis does not have to report the fee a Second time when collected. Thus, the amount should be included in gross income. Since the amounts are not income, none of the amount Should be included in gross income. please, ... please... Kindly an upvote .. Tq.