This Year Zach Was Injured in an Auto Accident

question 45

Multiple Choice

This year Zach was injured in an auto accident. As a result, he received the following payme1n0t2s) .Zach received $18,000 of disability pay. Zach has disability insurance provided by his employer as a nontaxable fringe benefit. Zach's employer paid $4,300 in disability premiums for Zach thisyear.Zach's hospital bills totaled $4,500 and were paid by his health insurance. Zach has healthinsurance provided by his employer as a nontaxable fringe benefit. Zach's employer paid $6,250 in health insurance premiums for Zach this year.What amount must Zach include in his gross income?

• A) $18,000
• B) $10,550
• C) $22,500
• D) $4,500
• E) Zero - none of the benefits are included in gross income.

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Definitions:

Twelve Months

A term commonly used in finance and business to refer to a full fiscal or calendar year.

Long-Term Debt

Debt obligations due for repayment in more than one year, often used for significant business investments.

Issue Date

The date on which a security (like a bond or stock) is issued or made available for sale.

Discounted Present Value

The current worth of a future sum of money or stream of cash flow given a specified rate of return.