Reference no: EM132385369

Questions -

Part A -

Q1. What is the basic income tax rule regarding alimony payments.

Q2.A. In what post seperation year will the payer of an excess alimony payment be required to include the excess in income

B. How is the excess alimony payment determined

Q3. Explain the federal tax consequences of transferring a life insurance policy pursuant to a separation agreement or divorce decree

Q4.A. Describe the general theory of annuity taxation

B. How is the excludible portion of either an annuity or a partial annuity payment determined.

Q5. Mrs. Mcginnis recently purchased a single premium immediate annuity. The premium was $13,000. She will receive payments of $100 a month for life. Assume that government tables show her life expectancy multiple to be 13.2 years.

Q6. How would your answer to question 8 change if there was a refund feature included in Mrs. Mcginniss's annuity> Assume for purposes of this question that the premium is still $13,000, the monthly payment is still $100, and the acturial present value of the refund feature is $2000

Q7.A. What is meant by a joint and survivor annuity

B. Explain how the expected return is calculated

Q8. Descrive the tax treatment of variable annuities

Q9. Mr. Gilkes purchased a variable annuity. The premium was $25,000. He will receive monthly income for life under the contract. Assume that his life expectancy multiple is 14.4 years.

A. What is his investment in the contract

B. Compute the amount that mr Gilkes can exclude annually

C. Assume Mr. Gilkes only received $1500 in the 10th year of the contract. Assume his life expectancy multiple is 9.1 years at that time. Redetermine the amount he may exclude until his investment is recovered tax free.

Q10. What is the penalty tax on a premature distribution from a deferred annuity

Q11. Explain the tax treatment of group term life insurance protection that provides benefits in excess of $50,000.

Q12. Explain the nondiscrimination requirements with regard to key employees that apply to the exclusion for group life insurance coverage.

Q13. When is property that is transferred in connection with the performance of services taxable to an employee?

Q14. What is meant by an employees election with respect to restricted property?

Part B -

Q1. What is the general rule for income tax treatment of property received by gift or inheritance?

Q2. What factors distinguish a gift from payment for services?

Q3. How is a bequest treated for income tax purposes when it is a specific lump sum amount paid in one installment out of estate income?

Q4. What is the general rule for taxation of interest on state and municipal bonds?

Q5. Explain how the following categories of municipal bonds are taxed:

A. public purpose bonds

B. nongovernmental purpose bonds

C. taxable municipal bonds

D. bonds issued prior to august 7 1986

Q6. Is interest on US savings bonds tax free for income tax purposes?

Q7. Bob and sharon stevens, both aged 69, are married and file a joint tax return. During the year, Mr. and Mrs. Stevens received $17,000 in social security benefits. In addition to the social security benefits, the Stevens received $3,000 of interest income on their tax exempt minuicpal bond fund, $5000 of interest on their savings account, and $12000 in fully taxable pension benefits. Do Bob and Sharon have to include any of their social security benefits in gross income?

Q8. Describe the income tax treatment of punitive damages paid pursuant to an action for personal injury

Q9. A. What is the general rule of taxation of amounts received under an employer provided accident and health plan?

B. Explain the exception to the general rule with regard to amounts expended for medical care.

C. Explain the exception to the general rule with regard to payments unrelated to absence from work.

Q10.A. How are premiums contribiuted by an employer to an accident and health plan treated by the employee for income tax purposes.

B. How are these payments treated by the employer?

Q11. A shareholder employee who is the highest paid employee of a company received $4000 in medical reimbursements for himself and his family this year from a self funded medical reimbursement plan. The only other medical reimbursement made by the company that year was to a secretary, who is not highly compensated. She was reimbursed $1000 for noninsured medical expenses.

A. Would the payments to the shareholder employee be discriminatory in favor of the highly compensated employee?

B. What would the tax result be if the answer was yes?