Exam REG Topic 1 Question 20 Discussion
Actual exam question for AICPA's REG exam
Question #: 20
Topic #: 1
Question #: 20
Topic #: 1
Darr, an employee of Sorce C corporation, is not a shareholder. Which of the following would be included
in a taxpayer's gross income?
in a taxpayer's gross income?
Suggested Answer: D Vote an answer
Explanation
Choice "d" is correct. An individual receiving common stock for services rendered must recognize the fair
market value as ordinary income. Any dividends received on that stock would also result in income
recognition.
Choice "a" is incorrect. Employer-provided medical insurance is a tax-free fringe benefit.
Choices "b" and "c" are incorrect. Gifts and inheritances are both tax-free to the recipient. (Remember tax
is often paid by the person giving the gift or the estate at death.)
Choice "d" is correct. An individual receiving common stock for services rendered must recognize the fair
market value as ordinary income. Any dividends received on that stock would also result in income
recognition.
Choice "a" is incorrect. Employer-provided medical insurance is a tax-free fringe benefit.
Choices "b" and "c" are incorrect. Gifts and inheritances are both tax-free to the recipient. (Remember tax
is often paid by the person giving the gift or the estate at death.)
by Hardy at Feb 05, 2025, 05:34 PM
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samorefre
2025-02-05 21:53:45Upvoting a comment with a selected answer will also increase the vote count towards that answer by one. So if you see a comment that you already agree with, you can upvote it instead of posting a new comment.
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