Your Friend Scotty Informs You That He Received a "Tax-Free

question 65

Multiple Choice

Your friend Scotty informs you that he received a "tax-free" reimbursement in 2010 of some medical expenses he paid in 2009.Which of the following statements best explains why Scotty is not required to report the reimbursement in gross income?

• A)Scotty itemized deductions in 2009.
• B)Scotty did not itemize deductions in 2009.
• C)Scotty itemized deductions in 2010.
• D)Scotty did not itemize deductions in 2010.
• E)Scotty itemized deductions in 2010 but not in 2009.

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Definitions:

Direct Planning Assumptions

Fundamental assumptions that are explicitly stated and used as a base in the strategic planning and forecasting processes.

Financial Ratios

Financial Ratios are quantitative measures derived from a company's financial statements to assess its performance, efficiency, profitability, and financial health.

Dividend Payout Ratio

The portion of earnings a company pays to its shareholders in the form of dividends, expressed as a percentage of the company's total net income.

Retained Earnings

Profits that a company has earned to date, less any dividends or other distributions paid to shareholders, often used for reinvestment in the business.