Dave Is a Plumber Who Uses the Cash Method of Accounting

question 29

Multiple Choice

Dave is a plumber who uses the cash method of accounting. This year Dave requested that his clients make their checks payable to his son, Steve. This year Steve received checks in the amount of $62,000 for Dave's plumbing services. Which of the following is a true statement?

• A)Dave is taxed on $62,000 of plumbing income this year.
• B)Steve is taxed on $62,000 of plumbing income this year.
• C)Steve is taxed on $62,000 of income from gifts received this year.
• D)Dave may deduct the $62,000 received by Steve.
• E)None of the choices are correct.

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Definitions:

Type A

Refers to a personality type characterized by high levels of competitiveness, self-imposed stress, and a sense of urgency, often linked with stress-related health issues.

Mindfulness Meditation

A practice focusing on present moment awareness, often used for stress reduction and to develop a deeper awareness of thoughts and emotions.

Current Experiences

Refers to the events or interactions that an individual is presently undergoing or encountering.

Stressful Memories

Recollections that are linked to distressing or traumatizing events, often causing emotional pain and anxiety when recalled.