Filedate 2406

Chapter 05 - Gross Income: Exclusions
South-Western Federal Taxation 2016

Comprehensive 39th Edition Test Bank
Full download at link:
Test Bank: https://testbankpack.com/p/test-bank-for-south-western-

federal-taxation-2016-comprehensive-39th-edition-boyd-hoffman-
maloney-raabe-young-1305395115-9781305395114/
Solution Manual: https://testbankpack.com/p/solution-manual-for-

south-western-federal-taxation-2016-comprehensive-39th-edition-
boyd-hoffman-maloney-raabe-young-1305395115-9781305395114/
1. For a person who is in the 35% marginal tax bracket, $1,000 of tax-exempt income is equivalent to $1,350 of income
that is subject to tax.
a. True
b. False
ANSWER: False
RATIONALE: $1,000 of tax-exempt income is equivalent to $1,538 [($1,000)/(1 – .35)] of income that is
subject to taxation. Income before tax of $1,538 yields $1,000 [$1,538 × (1 – .35)] of after-tax
income.
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: SIIT.HOSM.15.LO: 5-01 - LO: 5-01
SIIT.HOSM.15.LO: 5-02 - LO: 5-02
NATIONAL STANDARDS: United States - BUSPORG: Analytic
STATE STANDARDS: United States - AK - AICPA: FN-Measurement -
AICPA: FN-Measurement
KEYWORDS: Bloom's: Comprehension
OTHER: Time: 5 min.
2. John told his nephew, Steve, “if you maintain my house when I cannot, I will leave the house to you when I die." Steve
maintained the house and when John died Steve inherited the house. The value of the residence can be excluded from
Steve’s gross income as an inheritance.
a. True
b. False
ANSWER: False
RATIONALE: The house was received as a payment for services, rather than as a bequest.
Cengage Learning Testing, Powered by Cognero Page 1
© 2016 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a
certain product or service or otherwise on a password-protected website for classroom use
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 5 min.
3. Brooke works part-time as a waitress in a restaurant. For groups of 7 or more customers, the customer is charged 15%
of the bill for Brooke’s services. For parties of less than 7, the tips are voluntary. Brooke received $11,000 from the
groups of 7 or more and $7,000 in voluntary tips from all other customers. Using the customary 15% rate, her voluntary
tips would have been only $6,000. Brooke must include $18,000 ($11,000 + $7,000) in gross income.
a. True
b. False
ANSWER: True
RATIONALE: The tips are compensation for income tax purposes because they are received for her
services, rather than as a result of the customer’s “detached, disinterested generosity” (i.e.,
not a gift). She must include $18,000 ($11,000 + $7,000) in her gross income.
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Application
OTHER: Time: 5 min.
4. Mel was the beneficiary of a $45,000 group term life insurance policy on his wife. His wife’s employer paid all of the
premiums on the policy. Mel used the life insurance proceeds to purchase a United States Government bond, which paid
him $2,500 interest during the current year. Mel’s Federal gross income from the above is $2,500.
a. True
b. False
ANSWER: True
RATIONALE: The $2,500 interest on United States Government bonds must be included in gross income.
The life insurance proceeds of $45,000 are excluded from gross income.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 5 min.
5. Zack was the beneficiary of a life insurance policy on his wife. Zack had paid $20,000 in premiums on the policy. He
collected $50,000 on the policy when his wife died from a terminal illness. Because it took several months to process the
claim, the insurance company paid Zack $53,000, the face amount of the policy plus $3,000 interest. Zack must include
$23,000 in his gross income.
a. True
b. False
ANSWER: False
RATIONALE: The interest income of $3,000 is included in gross income because it represents interest
income. The life insurance proceeds of $50,000 are excludible from gross income under
§ 101(a).
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 5 min.
6. Ed died while employed by Violet Company. His wife collected $40,000 on a group term life insurance policy that
Violet provided its employees, and $6,000 of accrued salary Ed had earned prior to his death. All of the premiums on the
group term life insurance policy were excluded from the Ed’s gross income. Ed’s wife is required to recognize as gross
income only the $6,000 she received for the accrued salary.
a. True
b. False
ANSWER: True
RATIONALE: The $6,000 accrued salary Ed had earned must be included in his wife’s gross income. The
life insurance proceeds of $40,000 are excluded under § 101(a).
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 5 min.
7. Gary cashed in an insurance policy on his life. He needed the funds to pay for his terminally ill wife’s medical
expenses. He had paid $12,000 in premiums and he collected $30,000 from the insurance company. Gary is not required
to include the gain of $18,000 ($30,000 – $12,000) in gross income.
a. True
b. False
ANSWER: False
RATIONALE: The exclusion for terminal illness applies to policies on the terminally ill insured person. Gary
did not have the terminal illness.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 5 min.
8. When Betty was diagnosed as having a terminal illness, she sold her life insurance policy to Insurance Purchase, Inc., a
company that is licensed to invest in these types of contracts. Betty sold the policy for $32,000 and Insurance Purchase,
Inc., became the beneficiary. She had paid total premiums of $19,000. Betty died 8 months after the sale. Insurance
Purchase, Inc., collected $50,000 on the policy. The company had paid additional premiums of $4,000 on the policy. Betty
is not required to recognize a $13,000 gain from the sale of her life insurance policy and Insurance Purchase, Inc., is
required to recognize a $14,000 gain from the insurance policy.
a. True
b. False
ANSWER: True
RATIONALE: Betty’s gain is excluded from gross income because she was suffering from a terminal illness
when she sold the policy. However, Insurance Purchase, Inc., purchased the policy and,
therefore, is not eligible for the life insurance beneficiary’s exclusion. Insurance Purchase,
Inc., must report a gain of $14,000 ($50,000 – $32,000 – $4,000) because it purchased the
policy.
POINTS: 1
DIFFICULTY: Easy
United States - AK - AICPA: FN-Reporting

OTHER: Time: 5 min.
9. Agnes receives a $5,000 scholarship which covers her tuition at Parochial High School. She may not exclude the
$5,000 because the exclusion applies only to scholarships to attend college.
a. True
b. False
ANSWER: False
RATIONALE: Agnes is a degree candidate at an educational institution. There is no requirement that the
educational institution must be a college.
POINTS: 1
DIFFICULTY: Easy
STATE STANDARDS: United States - AK - AICPA: FN-Reporting
OTHER: Time: 2 min.
10. If a scholarship does not satisfy the requirements for a gift, the scholarship must be included in gross income.
a. True
b. False
ANSWER: False
RATIONALE: Scholarships are excludible under the scholarship provision (§ 117) rather than under the gift
exclusion provision (§ 102).
POINTS: 1
DIFFICULTY: Easy
KEYWORDS: Bloom's: Knowledge
OTHER: Time: 2 min.
11. Ashley received a scholarship to be used as follows: tuition $6,000; room and board $9,000; and books and laboratory
supplies $2,000. Ashley is required to include only $9,000 in her gross income.
a. True
b. False
ANSWER: True
RATIONALE: The room and board do not qualify for the exclusion under § 117. The amount received for
tuition, books, and supplies is excludible.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 5 min.
12. In December 2015, Emily, a cash basis taxpayer, received a $2,500 cash scholarship for the Spring semester of 2016.
However, she did not use the funds to pay the tuition until January 2016. Emily can exclude the $2,500 from her gross
income in 2015.
a. True
b. False
ANSWER: True
RATIONALE: Emily can exclude the $2,500 from her 2015 gross income, as the $2,500 is used to pay
tuition for the Spring semester of 2016.
POINTS: 1
DIFFICULTY: Easy
REFERENCES: p. 5-10
OTHER: Time: 5 min.
13. Betty received a graduate teaching assistantship that was awarded on the basis of academic achievement. The
payments must be included in her gross income.
a. True
b. False
ANSWER: True
RATIONALE: Such payments generally are for services rendered and therefore are not excluded from
Betty’s gross income as a scholarship.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 2 min.
14. In 2015, Theresa was in an automobile accident and suffered physical injuries. The accident was caused by Ramon’s
negligence. In 2016, Theresa collected from his insurance company. She received $15,000 for loss of income, $10,000 for
pain and suffering, $50,000 for punitive damages, and $6,000 for medical expenses which she had deducted on her 2015
tax return (the amount in excess of 10% of adjusted gross income). As a result of the above, Theresa’s 2016 gross income
is increased by $56,000.
a. True
b. False
ANSWER: True
RATIONALE: The punitive damages of $50,000 must be included in Theresa’s gross income. Also, the
medical expenses of $6,000 deducted in 2015 must be included in 2016 gross income under
the tax benefit rule.
POINTS: 1
DIFFICULTY: Easy
SIIT.HOSM.15.LO: 5-03 - LO: 5-03
OTHER: Time: 5 min.
15. Workers’ compensation benefits are included in gross income if the employer also pays the employee while the
employee is recovering from his or her injury.
a. True
b. False
ANSWER: False
RATIONALE: Benefits received under the workers’ compensation laws are excluded from a recipient’s
gross income.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 2 min.
16. Sam was unemployed for the first two months of 2015. During that time, he received $4,000 of state unemployment
benefits. He worked for the next six months and earned $14,000. In September, he was injured on the job and collected
$5,000 of workers’ compensation benefits. Sam’s Federal gross income from the above is $18,000 ($4,000 + $14,000).
a. True
b. False
ANSWER: True
RATIONALE: Sam must include in gross income $4,000 of unemployment benefits and his earned wages
of $14,000.
POINTS: 1
DIFFICULTY: Easy

OTHER: Time: 5 min.
17. Sarah’s employer pays the hospitalization insurance premiums for a policy that covers all employees and retired
former employees. After Sarah retires, the hospital insurance premiums paid for her by her employer can be excluded
from her gross income.
a. True
b. False
ANSWER: True
RATIONALE: All of the medical insurance premiums are excluded from Sarah’s gross income. The
exclusion applies to retired former employees as well as current employees.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 5 min.
18. Meg’s employer carries insurance on its employees that will pay an employee his or her regular salary while the
employee is away from work due to illness. The premiums for Meg’s coverage were $1,800. Meg was absent from work
for two months as a result of a kidney infection. Meg’s employer’s insurance company paid Meg’s regular salary of
$8,000 while she was away from work. Meg also collected $2,000 on a wage continuation policy she had purchased. Meg
must include $11,800 in her gross income.
a. True
b. False
ANSWER: False
RATIONALE: The insurance premiums of $1,800 paid by the employer and the $2,000 Meg collected on
the wage continuation policy she purchased are excluded from gross income. The sick pay
benefits received of $8,000 must be included in Meg’s gross income.
POINTS: 1
DIFFICULTY: Easy

OTHER: Time: 5 min.
19. Melody works for a company with only 22 employees. Her employer contributed $2,000 to her health savings account
(HSA), and the account earned $100 in interest during the year. Melody withdrew only $1,200 to pay medical expenses
during the year. Melody is not required to recognize any gross income from the HSA for the year.
a. True
b. False
ANSWER: True
RATIONALE: For an HSA, the employer’s contributions, earnings on the account, and withdrawals to pay
medical expenses can all be excluded from Melody’s gross income.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 2 min.
20. If an employer pays for the employee’s long-term care insurance premiums, the employee can exclude from gross
income the premiums but all of the benefits collected must be included in gross income.
a. True
b. False
ANSWER: False
RATIONALE: The premiums may be excluded, but only the benefits received in excess of a set daily
amount are included in gross income.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 2 min.
21. Employees of a CPA firm located in Maryland may exclude from gross income the meals and lodging provided by the
employer while they were on an audit in Delaware.
a. True
b. False
ANSWER: False
RATIONALE: Such amounts do not qualify for the meals and lodging exclusion under § 119 because they
are not provided on the employer’s business premises. Note such amounts can be excluded
as the reimbursement of employee business expenses.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 2 min.
22. Carla is a deputy sheriff. Her employer requires that she live in the county where she is employed. Housing is very
expensive; so the county agreed to pay her $4,800 per year to cover the higher cost of housing. Carla must include the
housing supplement in her gross income.
a. True
b. False
ANSWER: True
RATIONALE: The § 119 exclusion for lodging does not apply because the employer does not provide
housing on the employer’s premises.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 5 min.
23. Roger is in the 35% marginal tax bracket. Roger’s employer has created a flexible spending account for medical and
dental expenses that are not covered by the company’s health insurance plan. Roger had his salary reduced by $1,200
during the year for contributions to the flexible spending plan. However, Roger incurred only $1,100 in actual expenses
for which he was reimbursed. Under the plan, he must forfeit the $100 unused amount. His after-tax cost of overfunding
the plan is $65.
a. True
b. False
ANSWER: True
RATIONALE: Under this “use or lose” plan, his gross income was reduced by the $100 he forfeited.
Therefore, his after-tax loss from overfunding was $65 [(1 – .35)($100)].
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 5 min.
24. Mauve Company permits employees to occasionally use the copying machine for personal purposes. The copying
machine is located in the office where the higher paid executives work, so they occasionally use the machine. However,
the machine is not convenient for use by the lower paid warehouse employees and, thus, they never use the copier. The
use of the copy machine may not be excluded from gross income because the benefit is discriminatory.
a. True
b. False
ANSWER: False
RATIONALE: The benefit is “de minimis,” which means the cost of accounting for the benefit is great in
relation to the benefit conferred; thus, the anti-discrimination rules do not apply.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 5 min.
25. Fresh Bakery often has unsold donuts at the end of the day. The bakery allows employees to take the leftovers home.
The employees are not required to recognize gross income because the bakery does not incur any additional cost.
a. True
b. False
ANSWER: False
RATIONALE: The no-additional-cost exclusion applies only to services.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 2 min.
26. Nicole’s employer pays her $150 per month towards the cost of parking near a railway station where Nicole catches
the train to work. The employer also pays the cost of the rail pass, $75 per month. Nicole can exclude both of these
payments from her gross income.
a. True
b. False
ANSWER: True
RATIONALE: The parking and the rail pass are considered qualified transportation fringe benefits and can
be excluded from Nicole’s gross income. If the parking were not excludible as a qualified
transportation fringe, the amount would be includible in Nicole’s gross income because it is a
nondeductible commuting expense. The cost of the rail pass would not be deductible for the
same reason. Both of these amounts are below the statutory monthly ceiling.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 5 min.
27. A U.S. citizen who works in France from February 1, 2015 until January 31, 2016 is eligible for the foreign earned
income exclusion in 2015 and 2016.
a. True
b. False
ANSWER: True
RATIONALE: The taxpayer was working in the foreign country for at least 330 days in 12 consecutive
months. So the taxpayer qualifies for the foreign earned income exclusion for the eleven
month period in 2015 and the one month in 2016.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 2 min.
28. Generally, a U.S. citizen is required to include in gross income the salary and wages earned while working in a foreign
country even if the foreign country taxes the income.
a. True
b. False
ANSWER: False
RATIONALE: The income is included in gross income unless the foreign earned income exclusion applies.
To be eligible for the foreign earned income exclusion, the taxpayer must either (1) be a bona
fide resident of the foreign country or (2) be present in a foreign country for at least 330 days
during any 12 consecutive months. The exclusion applies regardless of whether the foreign
country taxes the income.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 2 min.
29. Calvin miscalculated his income in 2013 and overpaid his state income tax by $10,000. In 2015, he amended his 2013
state income tax return and received a $10,000 refund and $900 interest. Calvin itemized his deductions in 2013,
deducting $12,000 in state income tax and $30,000 total itemized deductions. As a result of the amended return in 2015,
Calvin must recognize $10,900 of gross income.
a. True
b. False
ANSWER: True
RATIONALE: The $10,000 is included in gross income under the tax benefit rule. Interest on a state tax
refund does not qualify for the state and local interest exclusion.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 2 min.
30. A cash basis taxpayer took an itemized deduction of $5,500 for state income tax paid in 2015. His total itemized
deductions in 2015 were $18,000. In 2016, he received a $900 refund of his 2015 state income tax. The taxpayer must
include the $900 refund in his 2016 Federal gross income in accordance with the tax benefit rule.
a. True
b. False
ANSWER: True
RATIONALE: The taxpayer’s 2015 taxable income was reduced by $5,500 as a result of paying the state
income tax. Therefore, under the tax benefit rule, the $900 refund must be included in 2016
gross income.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 5 min.
31. The taxpayer incorrectly took a $5,000 deduction (e.g., incorrectly calculated depreciation) in 2015 and as a result his
taxable income was reduced by $5,000. The taxpayer discovered his error in 2016. The taxpayer must add $5,000 to his
2016 gross income in accordance with the tax benefit rule to correct for the 2015 error.
a. True
b. False
ANSWER: False
RATIONALE: The tax benefit rule applies when the taxpayer claims a deduction in one year, but in a later
year receives an adjustment (e.g., a refund) to the amount of the expense.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 5 min.
32. Mia participated in a qualified state tuition program for the benefit of her son Michael. She contributed $15,000. When
Michael entered college, the balance in the fund satisfied the tuition charge of $20,000. When the funds were withdrawn
to pay the college tuition for Michael, neither Mia nor Michael must include $5,000 ($20,000 – $15,000) in gross income.
a. True
b. False
ANSWER: True
RATIONALE: The earnings of a qualified state tuition program are excluded from gross income provided
that the contributions and earnings are used for qualified higher education expenses.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 2 min.
33. The earnings from a qualified state tuition program account are deferred from taxation until they are used for qualified
higher education expenses. At that time, the amount taken from the fund must be included in the gross income of the
person who contributed to the account.
a. True
b. False
ANSWER: False
RATIONALE: The earnings from a qualified tuition program are excluded from gross income of the
contributor and the student when the funds are withdrawn to pay for qualified higher
education expenses. So exclusion treatment is appropriate in this situation.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 2 min.
34. Benny loaned $100,000 to his controlled corporation. When it became apparent the corporation would not be able to
repay the loan in the near future, Benny canceled the debt. The corporation should treat the cancellation as a nontaxable
contribution to capital.
a. True
b. False
ANSWER: True
RATIONALE: When a shareholder forgives his or her solvent corporation of its liability, the corporation is
not required to recognize income. The corporation is deemed to have received a contribution
of capital from the shareholder.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 2 min.
35. Zork Corporation was very profitable and had accumulated excess cash. The company decided to repurchase some of
its bonds that had been issued for $1,000,000. Because of an increase in market interest rates, Zork was able to retire the
bonds for $900,000. The company is not required to recognize $100,000 of income from the discharge of its indebtedness
but must reduce the basis in its assets.
a. True
b. False
ANSWER: False
RATIONALE: The reduction in liabilities increases the corporation’s net worth and, thus, the corporation
realized income. The basis reduction rules do not apply because the company is not
bankrupt or insolvent.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 2 min.
36. Amber Machinery Company purchased a building from Ted for $250,000 cash and a mortgage of $750,000. One year
after the transaction, the mortgage had been reduced to $725,000 by principal payments by Amber, but it was apparent
that Amber would not be able to continue to make the monthly payments on the mortgage. Ted reduced the amount owed
by Amber to $600,000. This reduced the monthly payments to a level that Amber could pay. Amber must recognize
$125,000 income from the reduction in the debt by Ted.
a. True
b. False
ANSWER: False
RATIONALE: The reduction in the debt is being made by the person who sold the property to Amber.
Therefore, Amber can reduce its basis in the building by $125,000, rather than recognizing
income of $125,000.
POINTS: 1
DIFFICULTY: Easy
OTHER: Time: 5 min.
37. The taxpayer’s marginal tax bracket is 25%. Which would the taxpayer prefer?
a. $1.00 taxable income rather than $1.25 tax-exempt income.
b. $1.00 taxable income rather than $.75 tax-exempt income.
c. $1.25 taxable income rather than $1.00 tax-exempt income.
d. $1.40 taxable income rather than $1.00 tax-exempt income.
e. None of these.
ANSWER: d
RATIONALE: The $1.40 of taxable income is greater after-tax than $1.00 in taxable income [(1 –
.25)($1.40) = $1.05]. Choice b. is incorrect because the $1.00 of taxable income and $.75 of
tax-exempt income are equal on an after-tax basis (1 – .25) × $1.00 = $.75. Choice c. is
incorrect because (1 – .25) × $1.25 = $.9375.
POINTS: 1
DIFFICULTY: Moderate
SIIT.HOSM.15.LO: 5-02 - LO: 5-02
OTHER: Time: 5 min.
38. Cash received by an employee from an employer:

a. Is not included in gross income if it was not earned.
b. Is not taxable unless the payor is legally obligated to make the payment.
c. Must always be included in gross income.
Another random document with
no related content on Scribd:
Not some felt need, or if they be
Not warm with loving sympathy.
If magic were my art, and I
Could banish from thine inner sky
All clouds of sorrow and of pain,
I would not do it. Following rain
Is brighter sky; at sorrow’s fire
Our joys are tempered. Mounting higher
Than human wish is human need,
And wrapped beneath the husks of creed
Is what we think, and feel, and know,
Of the deep things of God. And so
My best and only wish shall be
That thou mayst solve life’s mystery.
A SPRING REVERIE
Winter has at last unlocked the portals of his icy castle and ushered into
our presence the very queen of all the seasons. Let us fling open the
doorways of our hearts and give a generous welcome. How silently she
moves among us, and yet our finer ear may hear her in the springing grass
and opening blossoms. We feel her magic touch in everything about us. She
whispers, and the slumbering earth awakes to new life and beauty. Would we
might sing her praises with hearts as full as the happy, joyous birds.
I wonder, if we would, we could not make our daily lives fuller of praises
and thanksgiving-songs; clothe wearying, unlovely care, with beauty? And I
wonder, too, if we are not ourselves to blame, if in the pleasant walks of life
we gather not enough of sunshine up to last through cloudy weather? And
yet, we must dream our own dreams and live our own lives.
The hearts of little children drink in the spring sunshine as freely, even, as
the birds and flowers. And are not their voices sweeter than the song of birds
and their lives dearer than all the blossoms?
A maiden sits and dreams, and in her fancy she weaves the golden
meshes of a nest that will one day be her own, and if her morning and
evening carol shall be sweeter than the bird’s it is not strange, for is not her
nest dearer and her love deeper?
In the spring sunshine a mother muses, and her thoughts have flown
backward. She sits ’mid blasted buds and voiceless birds, in a springtime of
long ago; and though her whole pathway is strewn with flowers, it is not so
much to her as to know that on those little graves the violets are come again.
She tends them with a loving care, for they speak precious promises unto her
soul.
The aged couple number over and over again the many springtimes their
lives have known in light and shadow. They drink not in the full sunshine of
these delicious days, for their nest and nestlings are all gone, and they are
waiting for a more glorious springtime yet to come—waiting for eternal
sunshine and perpetual blossoms.
Upon the faces of men of great crime, through all the scars of sin, may be
found traces of happy days of innocence and pleasure. Doubtless, as the
springtime sun streams faintly into the cell of many a criminal, memory is
quickened to life by its soft rays, and flowers of tenderness which have long
slumbered bloom again, in the garden of his heart. Perhaps he may
remember days all sunshine, days of loving—when a dear face and the light
of glad eyes transfigured everything into a world of glory. But temptation,
like sorrow, overtakes us when we are least prepared, and on the stream of
life we either drift with its current, or with strength of will and determined
purpose, pull our fragile bark against it.
None need so much human sympathy and divine love and favor as the
poor in spirit. The poor in purse may vie in happiness with the rich; but to a
life from which the light of hope has all gone out, the journey to the end is
drear and desolate. Thus, it is we dream our own dreams and live our own
lives, however much we may live for others.
For myself—
To feel that the springtime is coming,
That the wildwood is all full of song;
That the leaves, and the grasses and blossoms,
In beauty are creeping along,
Thrills my soul with a deep song of gladness;

And the depths of my being are stirred,
Till I feel that the Master is tuning
My voice to the voice of the bird.
And what harmony thrills all creation,

From the brooklet’s musical flow
To the wonderful tide of the ocean,
With its ceaseless murmur of woe.
Yet, He who made earth, sky and all things,

Reckons man of Himself, a part—
And what to nature is budding and bloom,
Symbols love in the human heart.
And I look at the world as I see it,

With its mingled sorrow and strife,
And my lips cry out the thought of my heart,
What a wonderful thing is life!
With eyes to behold the glory of God

In the stars or the blossoms of Spring,
And hearts feel a love, that lips may not tell,
Of a glorified Presence, within.
TO HER DOLLY
Come here, poor little Dolly,

And sit upon my knee,
I will smooth your tangled tresses,
For I feel in sympathy.
You say your own little mamma

Has gone away, and so
You must be very lonely,
For you always used to go.
I can tell you a secret, Dolly,

I am sorry it is true,
But since your mamma has grown so tall
She cannot play with you.
Yet she’ll never forget you, Dolly,

She told me so to-day,
And said that you, and all your things,
She was going to put away.
And often, very often,

She would come and look at you,
Would take you up, and smooth your hair
And I’m sure that this is true.
For the mother heart never forgets us

Whatever you hear dolls say,
It always loves and forgives us
E’en when we go astray.
Perhaps, dear little Dolly,

In the days that are to be,
Other little pink hands will dress you,
And fondle you tenderly.
d o d e you te de y.
It may be her own little daughter

Will fold you to her breast,
And softly whisper, “I love you, dear,
I love you the very best.”
’Twere pleasant to dream of Dolly

As you lie in the dark up there,
Though it n’er come true, ’Twere better to hope,
For it saves us from despair.
MY PRAYER
How shall I pray to Thee, my God,

Out on the troubled sea;
Where billows rage and tempest roars—
How shall I pray to Thee?
How shall I pray to Thee, my God;

No beacon-light I see;
And I am far, so far, from home—
How shall I pray to Thee?
* * * * * * *
My life, nor wind, nor wave, can harm
Wherever I may be;
For here, or there, I am Thy child,
Through all eternity.
Still, I must pray to Thee, my God,

Whate’er Thy plan may be;
Till thought of Thee shall calm for me
The raging of the sea!
ANNIVERSARY ODE
Thoughts Suggested by the Anniversary of the Death of Longfellow.
A year ago to-day and the “Old Bells

Of Boston” told to waiting, anxious hearts,
That all was over. Hushed was human speech—
The busy town forgot its need of toil,
And rich and poor donned holiday attire
And wept together. He did sing for all,
And all did weep for him. E’en children’s tears,
Fell for him, for they loved him and his song.
O, noble King of Song! thy reign ends not
With death.
Thy kingdom is the human heart;

And just so long as sympathy can soothe,
Or words of hope encourage struggling souls,
So long thy kingdom will abide with men.
And as the clouds shed dewdrops on the flowers,
Or violets breathe their fragrance on the air,
E’en so thy poems, on our common lives,
Shed sweet refreshment, and we love thy name.
Surely “There is no death!” Such souls as thine
Make all life seem immortal. The sunshine,
From thy verse, dispels the clouds of doubt
With an effulgent glory. Hid with God
Is all the future; yet enough is shown
To stimulate our trust for all the rest.
And, as the raindrop, tracing back its source,
Finds it in mist of brook or ocean’s spray,
So, from the depth of the Eternal Love,
Springs individual being. Passing time
Is but as links in the unending chain,
Which binds the whole together Overhead
Which binds the whole together. Overhead,
Some stars shine brighter than the rest, yet each
Adds glory to the whole; beneath our feet
The spring flowers bloom again, the breath of some
Comes laden with a fragrance, which delights,
Some void of beauty, or of sweet perfume,
Yet in God’s fields no mean weed blooms in vain.
From filthiest pool as pure a drop of rain

May be distilled, as from the crystal river,
And must we not believe that darkened lives
Will, somehow, in God’s time, be glorified?
OUR HEROES
(Written for, and sung at G. A. R. Memorial Celebration.)
What fitter tribute could we bring,

Our Father and our God,
Than spring-time flowers with fragrance sweet,
To deck our heroes’ sod!
With magic word each open’ng flower

Proclaims, that all must die,
And dew drops glisten in each bud,
Like tear drops in the eye.
O, noble patriots! naught of ours,

Is meet for you, our braves,
But rarest gifts of God we bring,
And cast them on your graves.
And He who clothes the tender grass,

And decks the lily fair;
Will twine for you immortal flowers,
With His abiding care.
A CALL TO SPRING
Where art thou, tardy Spring?

E’en while my song I sing
Thou shouldst be with us.
O, couldst thou only see

What welcome waiteth thee,
In field and forest.
Art held by winter fast,

And hast not power to cast
Off his rude shackles?
Too long has been his reign,

Summon thy fairy train,
Charge him to loose thee.
Come to thy woodland bower,

Green grass and op’ning flower
Will spring to greet thee.
Red-vested troubadour
Hath left a sunny shore,
That he may cheer thee.
Blue-coated minstrelsy
Waiteth impatiently
For thy glad coming.
Sweet are the songs they sing,

As on impatient wing
Gaily they flutter.
Sweet—that a lover’s notes

May burst from feathered throats.
Is there a doubter?
Did ever regal ear,

In ancient ages hear
Music diviner?
Unto each human life

With all its joy and strife,
Come, with renewing.
Breathe o’er each new-made grave,

Till the green grasses wave,
Like victory’s banner.
Come with thy healing balm,

To the sick chamber—calm
All who are restless.
Breathe o’er each buried hope

Till some bright flower shall ope
With its peace message.
Unto each gladsome heart

Come, and thy store impart
Of joy and beauty.
Lovers are walking near

Hast thou no wish to hear
What they are saying?
If magic be thine art,

Unto such lives impart
Strength to be faithful.
Plead with the tempted heart,

That as the green blades start
From the dry grasses,
So from sin’s death and gloom

N lif i d bl
New life may rise and bloom,
And that forever,
Nobler than warrior’s claim,

Is the undying fame
Of souls victorious.
UPPER AIR
(To E. P. H.)
The chariot of the dawn rolls in
And, far above all care,
As freely as the gladsome lark
My thought finds upper air.
My thought finds upper air with thee:

O fear thou not, I pray,
That such rare visions of the soul
Unfit us for the way,
Our feet must journey. ’Tis not so:

For look thou—as we soar
Is there not glory in the vale
We never saw before?
Yet was there glory in the vale

And you and I were there—
The same blue sky was over head,
The same fond, brooding care
Was over us: yet we were blind

Till Love, like him of old,
Laid on our eyes his healing hand,
And lo, we now behold
Life as it is. Yet more and more,

As time shall roll away,
I trow new glories will unfold,
We dream not of to-day.
My thought finds upper air, my love,

And thou art with me there—
The glory of the mountain heights
We’ll carry everywhere.
DREAMS
Like beams of light to darkness,

Is fancy, to the real;
Lifting the down-cast spirit
Unto its high ideal.
Dreamers are all about us,

On mountain or by sea,
And had we no such visions,
Less bright this world would be.
The aged man is dreaming

Of merry boyhood days;
Of favorite haunts, and schoolmates,
And of their wonted plays.
His life was then all sunshine,

He roamed about at will;
And years passed on as smoothly,
As glides a laughing rill.
But time has brought her burdens

Of mingled pain and care;
They’ve bent his manly figure,
And silvered o’er his hair.
Stately is now his bearing,

He breathes a freer air;
Then call him not from dreamland,
For he is happy there.
He now beholds the Heavenly,

The dear ones gone before;
No more are they divided,
But with him, as of yore.
ut w t , as o yo e.
O, may such glorious visions

Oft to his spirit come;
For, surely, they are gateways
Unto that “Heavenly Home.”
The future to the youthful

Diffuses brightest beams;
All wants and wishes granted,
In golden future dreams.
O, many fairy castles

The youthful fancy rears!
But when the air dissolves them,
Oft come the bitter tears.
Still, chide them not for building,

Burdens will lighter seem;
And life, with all its shadows,
Be brighter for the dream.
Of what the infant dreameth,

The wisest ne’er may know;
Yet, they must be in dreamland,
When the dimples come and go.
Over a faded blossom,

Or shining curl, we dream,
Till absent forms, through memory,
E’en almost present seem.
Yes, dreams are fraught with blessings,

In love and mercy given;
And oft are golden stairways,
Which draw us nearer heaven.
THE OLD YEAR AND THE NEW
As at sea the eager voyager

Thoughtfully from shore to shore,
Waves farewell to scenes behind him,
Welcomes scenes that rise before;
So I stand upon Time’s ocean,
And, as from my outer view
Fades the old year’s face in glory,
Dawns the new in roseate hue.
Dear old year, forever loyal,

Listen to my thought of thee,
All thou hast been, all thou now art
Wilt thou be in memory.
Summing up my gain and losses,
Do I find my gain is more,
Wider vision, richer friendships
Have been added to my store.
Some, who walked with me, have vanished;

Yet at memory’s holy shrine
Do we meet in sweet communion;
Theirs am I, and they are mine.
For their influence on my journey
Life is sweeter, lighter care,
As the violet’s bloom is brighter
When the dewdrop sparkles there.
Dear Old Year—Lo! thou art vanished,

And here, standing in thy place,
Is the New Year, full of promise,
With the self-same care-free face
Thou did’st wear, when first I knew thee.
Welcome New Year! Hear my vow:
I ill tr st in all th f t re
I will trust in all thy future,
And will do thy bidding, now.
As ye enter with the new year,

Young or old, be brave at heart—
Life hath need of faithful service,
And each soul must bear its part;
Sweeter than a nation’s praises
For high deeds of valor done
Is the simple joy of duty,
Is the peace from victory won.
COLUMBUS
A Fragment
Brave Columbus! Did the Builder

Show to you his wondrous plan,
And inspire in you the courage
To reveal it unto man?
History shows no braver hero,

Living, or beneath the sod—
Shows no greater self-denial,
Shows no deeper faith in God.

Filedate 2406

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Filedate 2406

Uploaded by

Copyright:

Available Formats

Chapter 05 - Gross Income: Exclusions

South-Western Federal Taxation 2016

Test Bank: https://testbankpack.com/p/test-bank-for-south-western-

Solution Manual: https://testbankpack.com/p/solution-manual-for-

Cengage Learning Testing, Powered by Cognero Page 1

Cengage Learning Testing, Powered by Cognero Page 2

Cengage Learning Testing, Powered by Cognero Page 3

United States - AK - AICPA: FN-Reporting

Cengage Learning Testing, Powered by Cognero Page 4

United States - AK - AICPA: FN-Reporting

Cengage Learning Testing, Powered by Cognero Page 7

United States - AK - AICPA: FN-Reporting

Cengage Learning Testing, Powered by Cognero Page 8

Cengage Learning Testing, Powered by Cognero Page 9

Cengage Learning Testing, Powered by Cognero Page 10

Cengage Learning Testing, Powered by Cognero Page 13

38. Cash received by an employee from an employer:

Thrills my soul with a deep song of gladness;

And what harmony thrills all creation,

Yet, He who made earth, sky and all things,

And I look at the world as I see it,

With eyes to behold the glory of God

Come here, poor little Dolly,

You say your own little mamma

I can tell you a secret, Dolly,

Yet she’ll never forget you, Dolly,

And often, very often,

For the mother heart never forgets us

Perhaps, dear little Dolly,

It may be her own little daughter

’Twere pleasant to dream of Dolly

How shall I pray to Thee, my God,

How shall I pray to Thee, my God;

Still, I must pray to Thee, my God,

Thoughts Suggested by the Anniversary of the Death of Longfellow.

A year ago to-day and the “Old Bells

Thy kingdom is the human heart;

From filthiest pool as pure a drop of rain

(Written for, and sung at G. A. R. Memorial Celebration.)

What fitter tribute could we bring,

With magic word each open’ng flower

O, noble patriots! naught of ours,

And He who clothes the tender grass,

Where art thou, tardy Spring?

O, couldst thou only see

Art held by winter fast,

Too long has been his reign,

Come to thy woodland bower,

Sweet are the songs they sing,

Sweet—that a lover’s notes

Did ever regal ear,

Unto each human life

Breathe o’er each new-made grave,

Come with thy healing balm,

Breathe o’er each buried hope

Unto each gladsome heart

Lovers are walking near

If magic be thine art,

Plead with the tempted heart,

So from sin’s death and gloom

Nobler than warrior’s claim,

My thought finds upper air with thee: