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# Gross income, benefits, insurance policy payments

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
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.

#### 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
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