Mr. and Mrs. Alvin Charak took a foster child, Robert, into their home in 2015. A state welfare agency paid the Charaks $3,900 during the year for related expenses. Actual expenses incurred by the Charaks during 2015 in caring for Robert amounted to $3,000. The remaining $900 was spent by the Charaks in 2015 towards their own personal expenses. How much of the foster child payments is taxable income to the Charaks in 2015?
a. $0
b. $900
c. $2,900
d. $3,900
Answer: A
Tax
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- Income in respect of a cash-basis decedent
- Ed and Ann Ross were divorced in January of the current year. In accordance with the divorce decree, Ed transferred the title in their home to Ann. The home, which had a fair market value of $150,000, was subject to a $50,000 mortgage that had twenty more years to run. Monthly mortgage payments amount to $1,000. Under the terms of settlement, Ed is obligated to make the mortgage payments on the home for the full remaining twenty-year term of the indebtedness, regardless of how long Ann lives. Ed made twelve mortgage payments during the current year. What amount is taxable as alimony in Ann's current year return?
- In 2010, Ross was granted an incentive stock option (ISO) by her employer as part of an executive compensation package. Ross exercised the ISO in 2013 and sold the stock in 2015 at a gain. Ross was subject to regular tax for the year in which the
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- In July 1996, Dan Farley leased a building to Robert Shelter for a period of fifteen years at a monthly rental of $1,000 with no option to renew. At that time the building had a remaining estimated useful life of twenty years. Prior to taking possession of the building, shelter made improvements at a cost of $18,000. These improvements had an estimated useful life of twenty years at the commencement of the lease period. The lease expired on June 30, 2015, at which point the improvement had a fair market value of $2,000. The amount that Farley, the landlord, should include in his gross income for 2015 is
- Daniel Kelly received interest income from the following sources during the current year - New York Port Authority Bonds : $1,000 - Puerto Rico Commonwealth bonds : $1,800 What portion of such interest is tax exempt?
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- During the current year Hal Leff sustained a serious injury in the course of his employment. As a result of this injury, Hal received the following payments during the year: Worker's compensation ------------ $2,400 Reimbursement from his employer's accident and health plan for medical expenses paid by Hal and not deducted by him --------------------$1,800 Damages for physical injuries ----------------------$8,000 The amount to be included in Hal's gross income for the current year should be
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