TRUE/FALSE. Write "T" if the statement is true and 'F' if the statement is false. 1) Property settlements made incident to a divorce have no immediate tax consequences; that is, the transfer from one spouse to another is not taxable. 1) 2) 2) Tara is a taxpayer in the top tax bracket. She has a five-year-old daughter named Jane. Tara owns a small rental property. Tara has written into the lease that the monthly rent checks should be made payable to Jane. The checks are deposited into Jane's bank account. Jane enjoys the benefits of the rental income, and she will recognize the rental income on her tax return. 3) With some exceptions, amounts withdrawn from a pension plan prior to the normal starting date are subject to a ten percent nondeductible penalty. 3) 4) Mike won $700 in a football pool. This amount is not taxable. 4) 5) Improvements to leased property made by a lessee are includible in the lessor's gross income only if made in lieu of rent or if rent is reduced because of the improvements. 5) 6) Amy withdrew $3,000 from her qualified tuition plan to pay for a spring break trip to Cancun. The full $3,000 withdrawal is both included in income and subject to a 10% penalty. 6) 7) "Working condition fringe benefits, " such as memberships in professional organizations paid for by the employer, are generally excluded from the employee's gross income. 7) 8) Under both the accounting and tax law concepts of income, income must be "realized." 8) 9) Martina, who has been employed by the Smythe Corporation for ten years, receives a $400 watch as a length of service award in a meaningful presentation. The fair value of the watch is taxable. 9) 10) Becky wins a car and furniture on a television game show. The fair market value of these items is taxable to Becky. 10)