Cornell Is a Building Contractor Who Builds 25-30 Homes a Year

question 41

Multiple Choice

Cornell is a building contractor who builds 25-30 homes a year. Charlotte is a real estate broker who sells all of Cornell's homes. Charlotte has recently referred a couple to Cornell who wanted him to build a $400,000 home for them. Knowing that Charlotte and her husband enjoy skiing, he bought her a nice pair of skis and boots.
I.The "gift" appears to be a form of compensation.
II.The skis are considered a gift for income tax purposes.
III.Substance-over-form applies to this situation.
IV.Charlotte recognizes gross income from the receipt of the skis.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Statements I, III, and IV are correct.
• D)Statements II and IV are correct.
• E)Statements II, III, and IV are correct.

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Definitions:

External Environmental Condition

External factors outside an organization that can impact its performance, including economic, social, and regulatory conditions.

Union Steward

An elected representative of workers in a unionized environment who acts as an intermediary between the workforce and management.

Grievance Procedure

A formalized process that employees can use to voice and resolve workplace disputes, concerns, or complaints, often involving several steps including mediation and arbitration.

Bargaining Unit

A group of employees with a clear and identifiable community of interests who are represented by a single labor union in collective bargaining and labor negotiations.