ACC 322S

Study Tips for Exam 2, Chapters 5, 10, & 12

To help you prepare for the exam:
Review chapter content.
Review homework for each chapter. Try to work the problem without using check my
work, hints, or other resources. These resources will not be available to you during the
exam.
Review class notes and powerpoints posted in Bb.
Discussion questions, though not assigned, generally are a good study tool. They typically
do not go into a lot of depth, but do help you get a good overview of the chapter.
Do the practice quizzes for each chapter provided on the publishers web site.
Be sure to review these topics:
Chapter 5

Gifts and inheritances legislative intent, gifts to employees, employee death benefits
(hint: Dont get lost in the 5 specific requirements for employee death benefits to be
excluded. Just understand the general provision that unless the specific requirements
are met, death benefits paid by deceaseds employer are taxable)
Life insurance proceeds general rule, accelerated death benefits (terminally ill,
chronically ill), transfer for valuable consideration (Again, dont get lost in the 5 specific
exceptions; instead focus on the general rule that if someone purchased a life
insurance policy after it was issued, proceeds minus basis will be taxable.)
Scholarships general rule, timing, disguised compensation
Compensation for injuries and sickness damages, personal injury, compensatory
damages, punitive damages, workers comp, accident and health insurance benefits
Employer sponsored accident and health plans
Meals and lodging general rules (furnished by employer, on employers business
premises, for convenience of employer, condition of employment)
Employee fringe benefits specific benefits, cafeteria plans, flexible spending plans,
general classes of excluded benefits
Foreign earned income
Interest on certain state and local government obligations
Dividends cash and stock
Educational savings bonds
Qualified tuition programs
Tax benefit rule
Income from discharge of indebtedness (Again, a lot of specifics; focus on general
principle and be aware that there are exceptions.)

Chapter 10

Deductible vs. nondeductible expenses

Itemized Deductions (For each of these, you should know general provisions, applicable
floor or ceiling)

o Medical
o Taxes
o Interest
o Charitable contributions
o Miscellaneous itemized deductions
o Other miscellaneous itemized deductions not subject to 2% floor
Limitation on Certain Itemized Deductions (phase-out for high income taxpayers)
Know general provision, do not memorize thresholds, etc.

Chapter 12

Tax policy considerations

Refundable vs. nonrefundable credits
General business credit (Overview, dont worry about percentages, amounts, specifics of
provisions)
Other credits (know that they exist and generally what the target group is, but do not
worry about amounts & percentages)
o Elderly or disabled credit
o Adoption expense credit
o Energy credits
Other credits (know these pretty well)
o Earned income credit
o Child credit
o Child and dependent care credit
o American Opportunity credit
o Lifetime Learning credit
FICA tax provisions (employee & self-employed)
Estimated tax payments
Additional Medicare tax (generally, dont memorize thresholds)