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    Gross income, benefits, insurance policy payments

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    Mr. T has been a night watchman at Y Company for 10 years. During the current year, he received the following payments from Y Company:

    Salary: $15,000
    Hospitalization insurance premiums: $3,600
    Required lodging on Y's premises for Y's convenience as a condition to T's employment: $2,400
    Reward for preventing a break-in: $1,000
    Christmas ham (value): $15

    What amount is included in Mr. T's gross income in the current year?

    A. $17,400
    B. $16,015
    C. $16,000
    D. $15,000

    In 2013, Mr. and Mrs. Birch are both over 65 years of age and are filing a joint return. Their income for the current year consisted of the following:

    Taxable interest: $6,000
    Taxable dividends: $8,000
    Social Security payments (Mr. and Mrs. Birch combined): $15,000
    Tax-exempt interest: $4,000
    Taxable pension: $15,000

    They did not have any adjustments to income. What amount of Mr. and Mrs. Birch's Social Security benefits is taxable?

    A. $0
    B. $4,250
    C. $7,500
    D. $8,500

    Mrs. Dee's husband died in the current year. She chose to receive the proceeds of her husband's $100,000 life insurance policy over a 10-year period. The monthly installments are $1,200 each. What is the amount of the annual payments that represents gross income to Mrs. Dee?

    A. $0
    B. $2,000
    C. $4,400
    D. $14,400.

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    https://brainmass.com/business/accounting/gross-income-benefits-insurance-policy-payments-550095

    Solution Preview

    Mr. T has been a night watchman at Y Company for 10 years. During the current year, he received the following payments from Y Company:

    Salary: $15,000
    Hospitalization insurance premiums: $3,600
    Required lodging on Y's premises for Y's convenience as a condition to T's employment: $2,400
    Reward for preventing a break-in: $1,000
    Christmas ham (value): $15

    What amount is included in Mr. T's gross income in the current year?
    A. $17,400
    B. $16,015
    C. $16,000
    D. $15,000

    C. Insurance premiums for health care are nontaxable. Required lodging as a ...

    Solution Summary

    A sentence or two explains the choice indicated determining the gross income, benefits, and insurance policy payments.

    $2.19

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