As an Executive of Cherry, Inc

question 57

Multiple Choice

As an executive of Cherry, Inc., Ollie receives a fringe benefit in the form of annual tuition scholarships of $10,000 to each of his three children. The scholarships are paid by the company on behalf of the children of key employees directly to each child's educational institution and are payable only if the student maintains a B average.

• A) The tuition payments of $30,000 may be excluded from Ollie's gross income as a scholarship.
• B) The tuition payments of $10,000 each must be included in the child's gross income.
• C) The tuition payments of $30,000 may be excluded from Ollie's gross income because the payments are for the academic achievements of the children.
• D) The tuition payments of $30,000 must be included in Ollie's gross income.
• E) None of these.

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Definitions:

Unmarried Couple

A pair of individuals in a romantic relationship who live together but are not legally married.

Tenancy by the Entirety

A form of joint property ownership available only to married couples, where each spouse has an undivided interest in the property and right of survivorship.

Tenancy in Partnership

Tenancy in Partnership describes a form of ownership where partners possess an undivided interest in property owned by the partnership for the purpose of the partnership's business.

Tenancy in Common

A form of ownership where two or more individuals own property together, each holding a distinct, undivided interest.