DAC Foundation awarded Kent 75,000 in recognition of lifelong literary achievement. Kent was not required to render future services as a condition to receive the 75,000. What condition(s) must have been met for the award to be excluded from Kent's gross income?I. Kent was selected for the award by DAC without any action on Kent's part.II. Pursuant to Kent's designation, DAC paid the amount of the award either to a governmental unit or to a charitable organization.()
A. I only.
B. II only.
C. Both I and II.
D. Neither I nor II.
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Clark did not itemize deductions on his Year 8 federal income tax return. In July Year 9, Clark received a state income tax refund of 900 plus interest of 10, for overpayment of Year 8 state income tax. What amount of the state tax refund and interest is taxable on Clark's Year 9 federal income tax return?()
A. $0
B. $10
C. $900
D. $910
Which of the following is among the requirements to enable a taxpayer to be classified as a “qualifying window”?Ⅰ.A dependent has lived with the taxpayer for six months Ⅱ.The taxpayer has maintained the cost of the principal residence for six months
A. I only.
B. II only.
C. Both I and II.
D. Neither I nor II.
On December 1 of the current taxable year, Krest, a self-employed cash basis taxpayer, borrowed 200,000 to use in her business. The loan was to be repaid on November 30 of the following year. Krest paid the entire interest amount of 24,000 on December 1 of the current year. What amount of interest was deductible on Krest's current year income tax return?()
A. $0
B. $2,000
C. $22,000
D. $24,000
The Clarks have a 21-year-old son, Alex, who is a full-time student at the state university. Alex received 10,000 in scholarships this year for academic achievement. He also works part time at the university bookstore and earned 5,400 this year. The Clarks paid 7,000 to support Alex this year. Alex was home for two months in the summer and at school for the rest of the year. Alex used the scholarship, the earnings from the part-time job, and the money from his parents as his only source of support this year. Which of the following definitions does Alex meet for the Clarks?()
A. Qualifying child
B. Qualifying relative
C. Exemption
D. Qualifying