Question 1

A cash basis taxpayer must include as income the proceeds from the sale of an account receivable to a collection agency.

Accepted Answer

A) True 
 B)False

Question 2

In 2016,Grant's personal residence was completely destroyed by fire.Grant was insured for 100% of his actual loss,and he received the insurance settlement.Grant had adjusted gross income,before considering the casualty item,of $30,000.Pertinent data with respect to the residence follows:
Cost basis
$280,000
Value before casualty
250,000
Value after casualty
-0-
What is Grant's allowable casualty loss deduction?

Accepted Answer

A)  $0
B)  $6,500
C)  $6,900
D)  $10,000
E)  $80,000F) A) and C)
G) B) and D)

Question 3

A bona fide debt cannot arise on a loan between father and son.

Accepted Answer

A) True 
 B)False

Exam 7: Deductions and Losses Certain Business Expenses and Losses

Correct Answer
verified

A cash basis taxpayer must include as income the proceeds from the sale of an account receivable to a collection agency.

Correct Answer
verified

A bona fide debt cannot arise on a loan between father and son.

Correct Answer
verified

Exam 7: Deductions and Losses Certain Business Expenses and Losses

Correct AnswerverifiedShow Answer

A cash basis taxpayer must include as income the proceeds from the sale of an account receivable to a collection agency.

Correct AnswerverifiedShow Answer

A bona fide debt cannot arise on a loan between father and son.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified