James, a Cash Basis Taxpayer, Received the Following Compensation and Fringe

question 22

Multiple Choice

James, a cash basis taxpayer, received the following compensation and fringe benefits in the current year:
Salary ^$66,000
Disability income protection premiums ^3,000
Long-term care insurance premiums ^4,000
His actual salary was $72,000. He received only $66,000 because his salary was garnished and the employer paid $6,000 on James's credit card debt he owed. The wage continuation insurance is available to all employees and pays the employee three-fourths of the regular salary if the employee is sick or disabled. The long-term care insurance is available to all employees and pays $150 per day towards a nursing home or similar facility. What is James's gross income from the above?

• A) $66,000.
• B) $72,000.
• C) $73,000.
• D) $75,000.
• E) None of the above.

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Definitions:

Subduction-related Magmatism

The process of magma generation and volcanic activity that occurs in zones where one tectonic plate is subducted under another.

Continental Collision

The process by which two continental plates collide, leading to the formation of mountains and other geological features.

Transform Fault

A type of fault where two tectonic plates slide past each other horizontally, commonly found at plate boundaries and associated with significant earthquake activity.

Mid-ocean Ridge

An underwater mountain range formed by plate tectonics, where new oceanic crust is created through volcanic activity.