Wiley CPA Exam Questions – REG
The following is from the Online Wiley CPA Test Bank.
- Seymour Thomas named his wife, Penelope, the beneficiary of a $100,000 (face amount) insurance policy on his life. The policy provided that upon his death, the proceeds would be paid to Penelope with interest over her present life expectancy, which was calculated at 25 years. Seymour died during 2009 and Penelope received a payment of $5,200 from the insurance company. What amount should she include in her gross income for 2009?
- David Hetnar is covered by a $90,000 group-term life insurance policy of which his wife is the beneficiary. Hetnar’s employer pays the entire cost of the policy, for which the uniform annual premium is $1 per $1,000 of coverage. How much of this premium is taxable to Hetnar?
- Jon Moseley, who retired on October 31, 2008, receives a monthly pension benefit of $900 payable for life. His life expectancy at the date of retirement is 20 years. The first payment was received on November 15, 2008. During his years of employment, Moseley contributed $24,000 to the cost of his company’s pension plan. How much of the pension amounts received may Moseley exclude from taxable income for the years 2008, 2009, and 2010?
- Ryan Landerholm, an employee of Wendler Corporation, died on June 30, 2009. During July, Wendler made employee death payments (which do not represent the proceeds of life insurance) of $20,000 to his widow, and $20,000 to his 15-year-old son. What amounts should be included in gross income by the widow and son in their respective tax returns for 2009?
- During the current year Jay Walker was hit by a reckless driver and sustained serious injuries. Walker sued the driver and received the following payments during the year:
Damages for personal physical injury $ 80,000
Punitive damages 100,000
The amount to be included in Walker’s gross income for the current year should be
A: $ 200
B: $1,200
C: $4,200
D: $5,200
A: $0
B: $40
C: $50
D: $90
A: $0 in 2008, $0 in 2009, and $0 in 2010.
B: $1,800 in 2008, $10,800 in 2009, and $10,800 in 2010.
C: $1,800 in 2008, $1,800 in 2009, and $1,800 in 2010.
D: $200 in 2008, $1,200 in 2009, and $1,200 in 2010.
A: $15,000 for the widow, $20,000 for the son.
B: $17,500 for the widow, $17,500 for the son.
C: $20,000 for the widow, $20,000 for the son.
D: $15,000 for the widow, $15,000 for the son.
A: $0
B: $ 80,000
C: $100,000
D: $180,000
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