Answer all questions and problems appearing on this examination under rules governing federal income taxation. Unless instructed otherwise, assume the relevant year to be 2023.

True or False

1. A business bad debt is deductible only if the debt is completelyworthless.
2. Individual income tax laws were enacted by both Massachusetts and Virginia while they were colonies ofEngland.
3. An asset with a one year holding period will be classified as short-term for federal income taxpurposes.
4. Ifanindividualreceives adistributionoftaxablestock rights,thebasis oftherights will be their market value at the date ofdistribution.
5. If the House of Representatives and the Senate each pass a revenue bill, but the two versions differ in a substantive way, a Joint Conference Committee Committee considers the two versions and arrives at a compromise bill, which is then sent to each of the legislative houses for a finalvote.
6. A deduction for a qualifying IRA contribution is allowable on Form 1040 only if the individual is itemizing his/herdeductions.
7. A nonbusiness bad debt, when recognized, is always classified as a short-term capital loss for federal income taxpurposes.
8. An individual who is a resident of Canada, but who is neither a citizen nor a national of the United States, may not qualify as a dependent of a United States citizen.
9. Regarding a sale or exchange, the "amount realized" is defined for federal income tax purposes as the selling price reduced by the seller's basis for the assetsold.
10. .For purposes of qualifying as head of household, the costs of maintaining a householddonotincludethecostofmedicalcarefortheapplicabledependent.
11. Forfederal incometaxpurposes, incomewillbetaxedtotheindividualwhoearnedit, unless the individual assigns the income to anotherparty.
12. A small cash stipend, $25 for example, given by an employer to an employee at Christmas must be reported as gross income by the recipientemployee.
13. Dividendsreceived inexcessofthecumulativeamountofnetpremiumspaidonafullypaid up lifeinsurancepolicy generallyareincluded ingrossincome of thepolicyholder..
14. Tobeclassifiedasa"qualifyingchild,anindividualmusthavethesameplace ofabode as the taxpayer parent for the full tax year inquestion.