Each of the Numbered Items Below Is Accorded Only One

question 48

Multiple Choice

Each of the numbered items below is accorded only one of the following lettered treatments. Use the existing law as it applies to the current year, match the best answer to the statements below.
-Julian's tenant improves her side of the duplex by making improvements to the bathroom and kitchen that are worth $750. Julian does not adjust her rent for the $750 improvements.

• A)Fully excluded from gross income.
• B)Fully included in gross income.
• C)Partially excluded from gross income.

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Definitions:

Unrealized Gain-Equity

The increase in the value of investments that a company holds in other companies' stocks, which have not been sold and thus the gain has not been realized.

Debt Securities

Financial instruments representing a loan made by an investor to a borrower, typically corporate or governmental, which include terms related to the amount, interest rate, and maturity date.

Maturity Value

The amount payable to the holder of a financial instrument at its maturity date, often the principal plus any final interest payment.

Owner Relationship

The legal and operational connections and responsibilities between the owner(s) and their business entity.