Betsy receives a salary of $50,000 from her employer (a retail clothing store) and several fringe benefits. Her employer pays premiums of $300 for her $40,000 group term life insurance coverage and pays $2,400 for medical insurance premiums. Her employer provides dependent care facilities (where she places her young children while she is at work) valued at $4,500 per year. Her employer also allows employees to purchase clothing (the employer's inventory) at 50% off the retail sales price (which is 5% more than the employer's cost). During the year, Betsy purchases clothing with a retail value of $10,000 for $5,000. In addition to her salary, how much must Betsy include in gross income?© BrainMass Inc. brainmass.com March 5, 2021, 12:51 am ad1c9bdddf
Gross income is any and all income received by the taxpayer. The formula is as follows:
Income from whatever source
The fringe ...
Possessing the ability to define taxable and nontaxable portions of income is an important skill. This solution clearly defines the formula for gross income, taxable and nontaxable fringe benefits. The solution contains in-text citations, and a reference.