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AICPA CPA-Regulation Exam - Topic 1 Question 6 Discussion

Actual exam question for AICPA's CPA-Regulation exam
Question #: 6
Topic #: 1
[All CPA-Regulation Questions]

Tom and Joan Moore, both CPAs, filed a joint 1994 federal income tax return showing $70,000 in taxable income. During 1994, Tom's daughter Laura, age 16, resided with Tom. Laura had no income of her own and was Tom's dependent.

Determine the amount of income or loss, if any that should be included on page one of the Moores' 1994 Form 1040.

In 1994, Joan received $3,500 as beneficiary of the death benefit, which was provided by her brother's employer. Joan's brother did not have a nonforfeitable right to receive the money while living.

Show Suggested Answer Hide Answer
Suggested Answer: A

'A' is correct. $0. Life insurance proceeds received by reason of the death of the insured are not taxable income to the recipient.


by Cristal at May 03, 2022, 08:43 PM

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Ira
4 months ago
I agree, $0 makes sense here!
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Cora
4 months ago
Wait, so they don't report that $3,500 at all?
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Carla
4 months ago
I thought it might be taxable if it was over a certain amount?
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Janae
4 months ago
Definitely $0 for that benefit!
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Edelmira
5 months ago
The death benefit is usually not taxable, right?
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Aliza
5 months ago
I'm not sure about this one. I'd have to think through the pros and cons of each chart type to decide which is most preferable.
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Melina
5 months ago
I remember from our business ethics lectures that bid-rigging is an illegal practice where companies agree to not compete fairly. I'm leaning towards option B as the most precise term.
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Jesusita
5 months ago
This looks straightforward enough. The solution provided seems to meet the goal, so I'll go with that. I'll make sure to test it thoroughly, though, just to be safe.
upvoted 0 times
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Essie
5 months ago
Okay, I think the key is to focus on the collaboration and cooperation aspect. The options seem to be getting at potential issues that could arise from that.
upvoted 0 times
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