A taxpayer can avoid a substantial understatement of tax penalty: if the position is...
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Accounting
A taxpayer can avoid a substantial understatement of tax penalty:
- if the position is frivolous and disclosed on the tax return.
- if the position has a realistic possibility of being sustained by the IRS or courts.
- if there is substantial authority to support the position.
- if the position has a reasonable basis and is not disclosed on the tax return.
- None of the choices are correct.
Lebron received $76,300 of compensation from his employer and he received $545 of interest from a municipal bond. What is the amount of Lebron's gross income from these items?
- $0.
- $545.
- $76,300.
- $76,845.
$76,300 compensation. The interest income is excluded from gross income because it is interest from a municipal (tax-exempt) bond.
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