Answer

When does a cash method taxpayer recognize income? (State general rule and special rule/condition applicable to the cash method taxpayer). You may recite the rule in one sentence but be sure to state/explain the special rule/condition). When does an accrual method taxpayer recognize income? (State the general rule only and state the test applicable to the rule). What is the exception to the rule for the accrual method taxpayer? When is a prize or award excluded from income? (List the conditions) List two community property states and one common law state. Indicate whether the following dividends must be included in income: Yes/No Cash dividend Stock dividend option of cash or stock What is a capital asset? The preferential rates of 0/15/20 apply lo two categories of income. Name them. The topic of life insurance focuses of the amount of the that should be excluded from income while the topic of group term insurance focuses the amount of the that should be excluded