Tyler Pace received the following compensation and fringe benefits from his employer during the current year: Salary $100,000 Year-end bonus 10,000 Premium on $20,000 of nondiscriminatory group-term life insurance of which Tyler’s wife was the sole beneficiary 250 Sick pay due to illness paid directly by employer 750 Rental allowance for car used in commuting to work 4,000 What amount of these payments should be included in Tyler’s current-year gross income? A. $110,000 B. $115,000 C. $114,000 D. $114,750 Mr. and Mrs. Maynard received the following in the current year: Interest on a state of New Jersey bond $ 1,500 Blender for opening a savings account 50 Interest on U.S. Treasury bills 2,000 Interest on a state income tax refund 200 What amount of interest income should Mr. and Mrs. Maynard report on their current-year joint tax return? A. $3,750 B. $1,750 C. $3,700 D. $2,250 Mrs. Manilow’s husband died in November Year 1. She chose to receive the proceeds of his $125,000 life insurance policy over a 10-year period rather than as a lump-sum payment. She began receiving monthly payments of $1,500 in December Year 1. How much must Mrs. Manilow include in gross income from these payments in Year 2? A. $18,000 B. $12,500 C. $5,500 D. $0
Payments included in Taylor’s Gross taxable income will be:
Year-end bonus 10,000
Sick pay due to illness paid directly by employer 750
Rental allowance for car used in commuting to work 4,000
So Gross taxable income will be 114,750
Answer is D.