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VA Essay Topics > Taxation > Flashcards

Flashcards in Taxation Deck (11):
1

How is alimony treated by federal income tax?

Alimony is taxable income to receiving spouse
Alimony is a deduction to the paying spouse

2

How is child support treated for federal income tax purposes?

Not taxable to receiving spouse
Not a deduction for the paying spouse

3

Written agreement upon a divorce states that husband will pay ex-wife $50,000 per year until youngest child reaches 21, then payment will be $15,000. How much can husband deduct?

$15,000 - amount of reduction. This is considered alimony and the remaining $35,000 is considered child support.

4

Under VA law, how long do taxpayers have to retain records regarding tax returns?

3 year

5

Under VA law, what percentage of the costs for meals while on business may be deducted? cost for lodging?

50% for meals
100% for lodging

only if "away from home" - not same day

6

Are damages received as compensation for a physical personal injury fully taxable as ordinary income?

No.

7

Are punitive damages received for personal injury case fully taxable as ordinary income?

Yes.

8

All lottery tickets in VA printed after July 1, 1997, must bear what?

toll-free phone number for Gambler's anonymous

9

Gross income is defined as ____.

All income from whatever source derived

Alimony, lottery winnings and cancellation of debt is included
Gifts are not included - but not income from gift

10

How is real property taxed if the person owed the land for more than one year?

Long-term capital asset for federal taxation.

11

Are profits from the sale of reality treated as ordinary income for federal tax purposes?

No. Treated as capital asset subject to capital gains tax (long if more than one year)