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ACCT 553 Week 2 Homework Assignment
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Chapter 4

1.Your brother is short on cash and cannot pay his rent this month.
You pay his rent for him. Is this taxable income to your brother? Do
you get a deduction? (2 pts)

2.Which of the following items would beexcluded from income? (a)
$100 bill found under the sugar caddy at the restaurant (b) Inheritance
of a car from your grandmother valued at $5,000. (c) Loan from your
father-in-law to start your business, (d) Child Support received
totaling $16,500. (4 pts)

Chapter 5

3. Shaun & Kayla earned the following in 2013: Interest on a Savings
account of $36, Interest on a U.S. Series EE Savings Bond of $25,
Interest on a CD that has not matured yet of $20. How much taxable
interest income must they report on their 2013 tax return? (4 pts)

4. Explain what a Cafeteria Plan is (hint: it has nothing to do with
what you eat between classes