A Review of the 2015 Tax File of Gregory,a Single

question 14

Multiple Choice

A review of the 2015 tax file of Gregory,a single taxpayer who is age 40,provides the following information regarding Gregory's 2015 tax status: In 2016,Gregory receives a reimbursement for last year's medical expenses of $1,200.As a result,Gregory must

• A)include $200 in gross income for 2016.
• B)include $1,200 in gross income for 2016.
• C)reduce 2016's medical expenses by $1,200.
• D)amend the 2015 return.

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Definitions:

Corporate Debt

Financial obligations owed by a corporation, typically in the form of bonds, loans, or other types of securities.

Charitable Contributions

Donations made to qualifying organizations which may be deductible from the donor's taxable income, subject to IRS rules and limitations.

Tax Liability

The total amount of taxes owed to federal, state, or local tax authorities for a given period, before any payments or credits are applied.

Taxable Income

The amount of an individual's or corporation's income used to determine how much tax is owed, after all deductions and exemptions are accounted for.