Tax Preparation Income Types and Reporting 2

Question 1

A taxpayer wins $5,000 at a casino. How should this be reported?

Accepted Answer

As Other Income on Schedule 1

Answer

It is tax-free if under $10,000

Answer

Only if a W-2G was issued

Answer

Gambling winnings are never taxable

Question 2

Alimony paid under a divorce agreement finalized in 2019 is treated how for the payer?

Accepted Answer

Deductible as an adjustment to income

Answer

Not deductible under the new law

Answer

Deductible only if itemizing

Answer

Added to the payer's gross income

Question 3

Which form is used to report interest income of $1,500 from a bank account?

Accepted Answer

Schedule B

Answer

Schedule D

Answer

Form 4952

Answer

Schedule E

Question 4

A taxpayer receives a state tax refund. Under what condition is the refund taxable?

Accepted Answer

If the taxpayer itemized and deducted state taxes in the prior year

Answer

It is always taxable

Answer

Only if it exceeds $1,000

Answer

It is never taxable

Question 5

Which IRS form reports distributions from a traditional IRA or 401(k)?

Accepted Answer

Form 1099-R

Answer

Form W-2

Answer

Form 5498

Answer

Form 1099-DIV

Question 6

An employee is reimbursed $600 under an employer's accountable plan for business travel. How is this treated?

Accepted Answer

Excluded from taxable income

Answer

Included in W-2 wages

Answer

Reported on Schedule C

Answer

Deducted as a miscellaneous itemized deduction

A taxpayer wins $5,000 at a casino.How should this be reported?