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meacpa_2011
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Joined: 25 Oct 2011
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Posts: 31

Posted: 15 Nov 2011 at 04:36 \| IP Logged

During 2010, Adler had the following cash receipts.

Wages: 18000

Interest income from investment in municipal bonds: 400

Unemployment compensation: 1500

What is the total amount includible in gross income of Adler in 2010 income tax return?

a) 18000

b) 18400

c) 19500

d) 19900

I answered c). because this includes wages and unempl comp. But correct answer is mentioned as a). explaining with the hint that unempl comp replaces the wages which would have been included in gross income.

How is this answer correct? Please help.

divyagovil1
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Joined: 30 Jan 2009
Location: India
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Posts: 1456

Posted: 15 Nov 2011 at 05:36 \| IP Logged

My understanding, it should be included and answer should
be c).

If it would have been for 2009, it would have been tax-
free - First $2,400 of Unemployment Benefits Tax Free for
2009.

Refer following link:

http://www.irs.gov/newsroom/article/0,,id=205633,00.html

However,this is 2011 and question states 2010. I don't
think this exclusion would be applicable in 2010 and
2011. May be the book isn't updated.

I would suggest to drop a mail to the Becker Academic
support in case you are using Becker and cross verify
with them also.

__________________
Divya - CO State

Passed using Becker Review :
FAR - 04/11/09 - 94
BEC - 05/30/09 - 86
REG - 08/29/09 - 95
AUD - 11/21/09 - 92
Ethics - 2011

meacpa_2011
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Joined: 25 Oct 2011
Location: United States
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Posts: 31

Posted: 15 Nov 2011 at 14:05 \| IP Logged

Thanks Divya, i will check with Becker. Congrats to you on your scores. They are very good!

I had actually posted a simulation qn-"Wiley simulation-please help". Think u have passed with Becker, but do u know the answer to the simulation qn? it would be great if u cd help out ! i have not been able to figure that one out.

divyagovil1
Major Contributor

Joined: 30 Jan 2009
Location: India
Online Status: Offline
Posts: 1456

Posted: 16 Nov 2011 at 03:28 \| IP Logged

Pls check the post updated on "Wiley simulation". Hope that
helps...

All the best for your exam :)

__________________
Divya - CO State

Passed using Becker Review :
FAR - 04/11/09 - 94
BEC - 05/30/09 - 86
REG - 08/29/09 - 95
AUD - 11/21/09 - 92
Ethics - 2011

meacpa_2011
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Joined: 25 Oct 2011
Location: United States
Online Status: Offline
Posts: 31

Posted: 16 Nov 2011 at 03:55 \| IP Logged

Thanks very much for clarifying. It has really helped.

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