Is the following statement correct regarding exclusions or deductions? Cancellation of debt for a taxpayer's credit card bill is a deduction from federal gross income.
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- 1. Bad debt is an expense in the books of accounts when a provision is made for it. Such amount should likewise be deducted from gross income to arrive at taxable income. 2. The phrase "actually charged off from taxpayer's book of accounts" means that the amount of money lent by the taxpayer (in the course of his business, trade or profession) to his debtor that had been recorded in the books of account as receivable has actually become worthless as of the end of the taxable year, and that the said receivable has been cancelled and written off from the said taxpayer's books of accounts. A= 1st statement is true, second statement is false. B= 1st statement is false, second statement is true. C= Both statements are false. D= Both statement are true. с B OA DH6. 13 A claim for refund is a request for reimbursement of the overpayment of taxes paid in previous years. To be valid, a claim for refund must include which of the following features? Select one: a. The claim for refund can be made by telephone or in writing. b. The claim for refund must be signed only by the taxpayer c. The claim for refund must be filed within the set statute of limitations d. All of the above are correct Please explain also wrong options and explain with details43. True or False. If the debt is canceled due to services rendered by the debtor, the basis of tax is the value of the service rendered.
- Question 8: Which of the following is not a mandatory deduction from gross pay? Answer: A. Federal income tax withholding В. Union dues C. Social Security tax D. Medicare tax B.Question 4: Taxable earnings for Social Security tax are always the same as taxable earnings for federal income tax withholding. Answer: A. O True В. O False26. Specific provisions for bad debts are deductible for tax purposes once the taxpayer is able to demonstrate that reasonable steps were taken to collect the debts. Select one: True False
- Which of the following statements about credits is false? A. Credits reduce a taxpayer's liability dollar for dollar. B. Not all credits are refundable. C. The CARES Act stimulus payments were advance credits for 2020. D.Nonrefundable credits are limited to the tax balance due.Which of the following is not a liability?a. Income taxes payableb. Accrued warranties payablec. Accrued vacation payd. Allowance for bad debtsWhich of the following can be deducted as interest expense? Interest on personal debt Interest on debt from a related creditor Imputed interest on capital Interest on assessed tax delinquency ANSWER:
