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

question 19

Multiple Choice

James, a cash basis taxpayer, received the following compensation and fringe benefits in the current year:

$$\begin{array} { lr } \text { Salary } &\$ 66,000 \\\text { Disability income protection premiums } &3,000 \\\text {Long-term care insurance premiums } &4,000\end{array}$$
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 these.

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Definitions:

Crafts Activity

Creative activities involving the making of decorative or functional items by hand.

Performance Portion

The segment or part of an evaluation or assessment that measures the actual execution or demonstration of skills and knowledge.

Curfew

A regulation or order specifying a time by which individuals must remain indoors, typically enforced by authorities to maintain public order.

Weeknights

The evenings of the weekdays, typically from Monday to Friday, considered as a timeframe for routine activities.